Crown Estate Bill [ Lords ] (Second sitting)

James Wild Excerpts

Committee stage
Thursday 6th February 2025 Public Bill Committees

[James Murray]

Clause 5 would require the Crown Estate commissioners to assess the environmental impact and animal welfare standards of salmon farms on the Crown Estate on an ongoing basis. Where that assessment determines that a salmon farm is causing environmental damage or has significant animal welfare issues, the Crown Estate would be required to revoke the relevant licence. The commissioners would be required to make the same assessment of any applications for new licences for salmon farms, and where they determine that an application may cause environmental damage or raises significant animal welfare concerns, the Crown Estate must refuse the application.

During the Bill’s passage in the other place, peers felt it necessary to amend the Bill to add clause 5. The Government understand the objectives behind the clause, but we are unable to support it, as it would duplicate existing protections. Fisheries policy is also largely devolved, and therefore responsibility for this issue in Scotland, Wales and Northern Ireland rests with the relevant devolved Government. At present, virtually all salmon aquaculture in the UK takes place in Scotland, and the management of the Crown Estate in Scotland is also a devolved matter.

For those reasons, the clause would have almost no impact in practice on farmed salmon in the UK. As it stands, it risks impeding an already thoroughly regulated industry, while having little to no positive impact, due to the territorial realities of the Bill. Therefore, I do not recommend clause 5 to the Committee.

[James Wild (North West Norfolk) (Con)]

It is a pleasure to serve under your chairmanship again so soon, Mr Mundell. As the Minister noted, the clause was added in the other place, particularly following the efforts of my noble Friend Lord Forsyth of Drumlean. It was backed by peers from across the parties, and Labour peers may have supported it as well. The Minister says that it duplicates provisions that exist. Given that the Government said in the House of Lords that they support its objective, it is clearly disappointing to see them removing these provisions, with the message that that sends about the importance of protecting the future of wild Atlantic salmon.

Question put and negatived.

Clause 6

Commissioners with special responsibility

Question proposed, That the clause stand part of the Bill.

[James Murray]

Clause 6 amends the Crown Estate Act 1961 to require the appointment of commissioners with special responsibility for giving advice about England, Wales and Northern Ireland. That responsibility would be in addition to the other responsibilities of a commissioner. For appointments relating to Wales and Northern Ireland, no recommendation may be made to His Majesty, unless Welsh Ministers and the Executive Office in Northern Ireland have been consulted.

The legislative changes brought about by clause 6 ensure that those on the board of commissioners of the Crown Estate continue working in the best interests of Wales and Northern Ireland, alongside performing their existing duties as commissioners. The clause, which was added as an amendment, following Government support in the other place, will bring knowledge of the devolved nations even more directly to the board table and will supplement the expertise of the Crown Estate’s director for the devolved nations, who is based in its recently opened office in Cardiff. The clause will ensure that the board of commissioners of the Crown Estate continues working in the best interests of Wales and Northern Ireland. I therefore commend it to the Committee.

[James Wild]

This is a pretty straightforward clause. It is one of those that were added to the Bill in the other place to improve it, and I hope the Minister might learn the lesson of those clauses as we come to consider the new clauses shortly.

Question put and agreed to.

Clause 6 accordingly ordered to stand part of the Bill.

Clause 7

Extent, commencement and short title

[James Murray]

I beg to move amendment 3, in clause 7, page 4, line 4, leave out subsection (4).

This amendment removes the privilege amendment inserted by the House of Lords.

[James Murray]

These are very straightforward matters to debate. Government amendment 3 removes the privilege amendment inserted by the other place. Clause 7 sets out the Bill’s extent, commencement period and short title in the usual manner for such legislation. I commend Government amendment 3 and clause 7 to the Committee.

[James Wild]

Thank you for calling me to speak again, Mr Mundell—it is good to get the exercise. There is not much to add on this very straightforward clause and amendment, other than that the commencement date, which brings the legislation into force automatically within two years, could usefully be applied to other legislation from the last Parliament. Quite a lot of private Members’ Bills and other pieces of legislation were passed that have not been commenced. I could expand on that issue at length, Mr Mundell, but you would rightly say that it was not in scope. However, car parking regulations, for example, have not been brought into the code of practice or into effect. Having a clear date in legislation to say, “This will happen, as long as the Bill passes,” is a good thing to do.

Amendment 3 agreed to.

Clause 7, as amended, ordered to stand part of the Bill.

New Clause 2

Territorial seabed

“After section 3A of the Crown Estate Act 1961 (inserted by section 1 of this Act) insert—

‘3AA Restriction on permanently disposing of interest in seabed etc

(1) The Commissioners may not without the consent of the Treasury permanently dispose of—

(a) any part of the territorial seabed, or

(b) any interest, right or privilege over or in relation to the territorial seabed,

which forms part of the Crown Estate.

(2) Accordingly, without that consent, any purported disposal of a kind mentioned in subsection (1) is void.

(3) In subsection (1), “territorial seabed” means the seabed and subsoil within the seaward limits of the United Kingdom territorial waters.’”—(James Murray.)

This new clause requires the Crown Estate Commissioners to obtain consent from the Treasury before they permanently dispose of any of the Crown Estate’s interest in, or rights or privileges in relation to, the territorial seabed.

Brought up, and read the First time.

[James Murray]

I beg to move, That the clause be read a Second time.

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[James Wild]

I will respond to Government new clause 2 and to new clause 3, which was tabled in my name. As we heard from the Minister, Government new clause 2 will require the Crown Estate commissioners to obtain consent from the Treasury before they permanently dispose of any of the Crown Estate’s interest in, or rights or privileges in relation to, the territorial seabed. The Government moved this measure because of the extensive debate in the other place about the sale of certain assets, and particularly the seabed. We welcome the constructive approach taken by Ministers; Lord Livermore gave a commitment in the other place, and it has been honoured today, so we will support the new clause.

Although we welcome the new clause, we still have concerns about the disposal of other assets. My new clause 3 would require the Crown Estate commissioners to seek approval from His Majesty’s Treasury for the disposal of assets totalling 10% or more of the Crown Estate’s total assets. It would also require the Chancellor to lay a report before Parliament within 28 days of being notified of such a disposal by the commissioners.

As previously noted in Committee, the Crown Estate owns some of the nation’s most vital assets. It is somewhat surprising to find that there are few safeguards to prevent the Crown Estate commissioners from deciding to sell critical assets. That is why the debate in the other place, which exposed the issue of the seabed and brought about new clause 2, was so important. However, the Crown Estate has lots of other assets, which Members may wish to refer to and which they may think also deserve special attention.

In the original business case for modernisation of the Crown Estate, which is publicly available, it was noted that the Crown Estate was planning £1.4 billion of disposals, which—coincidentally enough—equates to nearly 10% of its portfolio. In the other place, my noble Friends suggested a disposal limit of anything greater than £10 million. The noble Lord Livermore responded:

“It is the Government’s view that imposing a statutory limit on disposals in this way would undermine the flexibility required by the Crown Estate to ensure that it can operate commercially and fulfil its core duties under the future Act.”—[Official Report, House of Lords, 5 November 2024; Vol. 840, c. 1411.]

The Minister made a similar argument in his speech, but I am not sure that it is right. Given that the assets are held for the benefit of the nation, there should be some form of greater transparency if they are to be disposed of. Reporting to Parliament and seeking approval from the Treasury for disposals over a set percentage would provide such transparency.

The disposal of assets by the Crown Estate should be properly scrutinised, given its important role and statutory purpose. When I asked the Crown Estate about its planned disposals—the £1.4 billion referred to in document on the modernisation of the Crown Estate, which any Member may access—it said that it was unable to disclose its plans. Members might guess that the old “confidential, commercially sensitive” reason was given. That raises concerns about transparency. Will the Minister confirm whether he knows which assets were included in that figure and whether the Crown Estate plans further disposals? I asked the same question on Second Reading, and the Minister replied to most of my points, but that is one he did not reply to. Perhaps he will do so on this occasion.

Having reflected on the debates in the other place, we have changed our approach from a £10 million cap to a 10% cap, after which new clause 3 would require approval and a report to Parliament. That is a modest measure, which would not inhibit the commercial freedom of the Crown Estate to take such decisions if it wants to. It owns assets such as Great Windsor Park and others, and who knows which it may decide to sell at some point in the future? Such assets are held in right of the Crown, so this is not about the sovereign’s private income, but about the income generated for the taxpayer. Transparency is something that the Government should endorse.

[James Murray]

I thank the shadow Minister for his comments, but imposing a limit on disposals would undermine the flexibility needed to enable the Crown Estate to operate commercially and meet its core duties under the Crown Estate Act 1961. As I mentioned earlier, there may be instances where it makes commercial sense to dispose of high-value assets, particularly when the Crown Estate, by its nature, takes a longer-term view of the business and its strategy.

[James Wild]

The Minister talked about flexibility, but the Crown Estate would not suddenly decide tomorrow to sell some asset; it will have a business case and a process. That business case will go to the Chancellor, who will get advice rapidly—within a matter of hours or a day—either approve it or not, and report to the House. I do not see what the flexibility issue is.

[James Murray]

I point the shadow Minister to the way the system currently operates. The Crown Estate operates independently from Government, but there is a long-standing, constructive and transparent relationship between it and the Treasury. That ensures that the Government will be consulted on any potential sale of a nationally significant asset. That is underpinned by the Crown Estate’s framework document, which makes it clear that the Crown Estate should inform the Treasury

“of any matters concerning spending, income or finance that are novel, contentious or repercussive.”

That is an important point to highlight in terms of the way the system currently operates.

However, I return to my earlier point, which is that the Crown Estate is an independent commercial business, and it is not the Government’s intention to materially alter its independence in such a way that the Treasury is required to approve its business decisions. I reassure the shadow Minister and others on the Committee that the Crown Estate’s core duty, which is to maintain an estate in land and to enhance and maintain the value of the estate, is unchanged by the Bill.

Finally, to respond to the question about the £1.4 billion of disposals outlined in the business case, those published as part of the Lords stages relate to non-strategic assets.

Question put and agreed to.

New clause 2 accordingly read a Second time, and added to the Bill.

New Clause 3

Limit on the disposal of assets

“After section 3 of the Crown Estate Act 1961, insert—

‘3A Limit on the disposal of assets

(1) The Commissioners must inform the Treasury if the disposal of assets of the Crown Estate will be of a value totalling 10% or more of the Crown Estate’s total assets in a single year.

(2) The Treasury must approve of any disposal of assets above the threshold in subsection (1) and the Chancellor of the Exchequer must lay a report before Parliament within 28 days of being notified by the Commissioners.’” —(James Wild.)

This new clause requires the Crown Estate Commissioners to notify and seek HM Treasury approval for the disposal of assets totalling 10% or more of the Crown Estate’s total assets.

Brought up, and read the First time.

Question put, That the clause be read a Second time.

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[Pippa Heylings]

Nobody is saying that this is easy, but it is possible, and it has happened with Scotland. As many Members have said to us, given that we have territorial devolution and powers over the land, why not the seabed as well? There are ways of managing this, so complexity should not get in the way of ensuring that we have fairness in the distribution of economic benefits.

This funding is desperately needed, particularly given the historical underfunding of Wales on issues such as infrastructure. The success of devolution in Scotland speaks for itself; since 2017, when Scotland gained control of the Crown Estate, it has generated more than £103 million for public finances, so let us think what could happen for Wales if it was able to retain the profits generated by the Crown Estate within their borders.

Wales is expected to generate at least £1 billion from offshore wind energy leases in the coming years alone. Keeping some of that money within Wales could add £50 million a year to the Welsh Government’s budget—funds that could be directly reinvested in public services and local communities.

But this is not just about the financial gain; as the hon. Member for Ynys Môn said, devolving the Crown Estate would open up opportunities for greater investment in renewable energy projects. That is particularly important for coastal communities, which have long suffered from the decline of traditional industries. When they see direct benefits from renewable projects, they are far more likely to support them. That would create jobs, opportunities and sustainable development, delivering long-term economic stability, especially for the coastal regions of Wales that need it most.

The devolution of the Crown Estate has widespread support across Wales, from the Liberal Democrats in this place and the Welsh Parliament to Plaid Cymru, a majority of local authorities in Wales and even to the Welsh Labour Government. There is clear and overwhelming backing. In addition, opinion polls consistently show that the majority of the Welsh public are in favour of seeing the Crown Estate devolved, and it is clear that the people of Wales want to see this change. We want to work together, and I urge the Government to support this new clause and allow Wales to benefit from the powers and financial resources that it so rightly deserves.

[James Wild]

I will not detain the Committee for long. The hon. Member for Ynys Môn referred to the previous Conservative Government’s position, which has not changed today. The proposal would introduce an element of risk in spinning out assets and revenue streams. We heard about the particulars of the Celtic sea, so this is not the right proposal for this time.

[James Murray]

I thank the hon. Member for Ynys Môn for tabling new clause 5, which would require that within two years of the day on which the Act commences, the Treasury must have completed a transfer of the responsibility of the management of the Crown Estate in Wales to the Welsh Government. It would allow the Treasury, by regulations, to make provision about the transfer relating to reserved matters as necessary, and would require it to make provision to ensure that the employment of any person in Crown employment is not adversely affected by the transfer of responsibility.

I also thank the hon. Member for South Cambridgeshire for tabling new clause 12, which would require the Treasury to set out a scheme to transfer all existing Welsh functions of the Crown Estate commissioners to Welsh Ministers or a person nominated by Welsh Ministers. The Welsh functions would consist of the property, rights or interests in land in Wales and rights in relation to the Welsh zone.

The Government believe there is greater benefit for the people of Wales and the wider United Kingdom in retaining the Crown Estate’s current form. Both new clauses would most likely require the creation of a new entity to take on the management of the Crown Estate in Wales which, by definition, would not benefit from the Crown Estate’s current substantial capability, capital and systems abilities. It would further fragment the UK energy market by adding an additional entity and, as a consequence, risk damaging international investor confidence in UK renewables and disrupting the National Energy System Operator’s grid connectivity reform, which is taking a whole-systems approach to the planning of generation and network infrastructure. Its reform aims to create a more efficient system and reduce the waiting times for generation projects to connect to the grid.

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[The Chair]

Do you wish to say anything, Mr Wild?

[James Wild]

Well—

[The Chair]

It is not compulsory.

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[James Wild]

I am up now. I will not detain the Committee long. We did not support new clause 5, so it follows that we do not support new clause 6, although it raises a thought in my mind. The east of England, which is home to the largest offshore wind sites in Europe, is perhaps not getting its fair dibs. That is probably something I need to reflect on for another time.

[The Chair]

Indeed.

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[James Murray]

May I take this moment to thank all hon. Members on both sides of the Committee for their attendance and their contributions? I also thank you, Mr Mundell, for chairing the Committee. I thank the Treasury officials, the House of Commons officials and everyone else for making the Committee run so smoothly.

[James Wild]

I am grateful, Mr Mundell, for your chairing this afternoon, and I am grateful to Ms Furniss for chairing the first session this morning. I am grateful for the support, help and advice of the Clerks and for the contributions and responses provided by the Crown Estate during the passage of the Bill. I look forward to reconvening with Members for its remaining stages, which I understand will be on 24 February—they will be a pleasure. I am grateful to the Minister for getting on the record my strong opposition to the 100 miles of pylons coming from Grimsby to Walpole in my constituency and the need to look at underground options.

[The Chair]

As ever, it is a disappointment to me that I can take no further part in these proceedings.

Question put and agreed to.

Bill, as amended, accordingly to be reported.