Crown Estate Bill [HL]

Lord Livermore Excerpts

Report stage
Tuesday 5th November 2024 Lords Chamber

[The Financial Secretary to the Treasury (Lord Livermore) (Lab)]

My Lords, I am grateful for the contributions from all noble Lords on this group of amendments. As I set out in Committee, the Government recognise that the matter of controls on borrowing is an important consideration for noble Lords.

I listened carefully to the concerns raised at previous stages of the Bill. I found the arguments put forward by the noble Baroness, Lady Kramer, to be particularly compelling. As such, I committed to sharing the underpinning memorandum of understanding, which sets out the parameters and controls relating to the power to borrow, as well as the original business case and the framework document. Following on from my commitment, these documents were shared with noble Lords and have been deposited in the Library. I am grateful to the noble Baroness for her words just now.

The memorandum of understanding set out that borrowing by the Crown Estate will be limited to a maximum of 25% loan to value, defined as net debt-to-asset value, and that any borrowing within that limit can be undertaken only with the consent of the Treasury.

The framework document will be amended, as I have shared, to include references to borrowing powers, and the original business case produced by the Crown Estate makes the argument for the Crown Estate being able to borrow with the consent of the Treasury, in line with its peers, to ensure that it can continue to operate sustainably and drive maximum returns to the Exchequer.

I trust that having sight of these documents has been useful for noble Lords and has provided an additional opportunity for scrutiny of the proposed borrowing. Let me be clear that the Government agree that controls on borrowing must be in place. As I have set out previously, borrowing can be undertaken only with the consent of the Treasury and, as outlined in the memorandum of understanding, borrowing is not to exceed 25% of loan to value, defined as net debt-to-asset value. This is a clear and carefully chosen guard rail to ensure that sufficient limits are in place. The proposed powers will enable the Crown Estate to draw on its cash holdings first and, as such, it is not envisaged that these borrowing powers will be used in the short term.

Amendment 1, tabled by the noble Baroness, Lady Vere, and supported by the noble Lord, Lord Howard, would require the Secretary of State to limit borrowing by the Crown Estate by affirmative regulations, and for the first set of regulations to set the limit at 25% net debt-to-asset value.

As debated in Committee, the principle here is whether a specific cap should be in statute. The Government’s view remains that the limit is better placed outside of legislation. The primary control, set out in the Bill, is the requirement for Treasury consent to be obtained prior to undertaking any borrowing. In addition to this important safeguard, we are retaining the requirement for the Crown Estate commissioners to maintain and enhance the value of the estate, while having due regard to the requirements of good management as set out in the 1961 Act.

Taken together, these two elements maintain and strengthen the existing and important fiduciary duty of the commissioners not to take decisions that could endanger the estate. The Government believe that these safeguards and the limits set out in the memorandum of understanding provide clear guard rails to the powers set out in the Bill.

The 1961 Act also contains a power of direction. This power is not altered by the Bill. It remains open to the Government to use in extremis; if, for example, there were concerns that the commissioners were endangering the core statutory purpose of the Crown Estate.

As I have set out previously, the Crown Estate is a commercial business, independent from government. It operates for profit and competes in the commercial markets for investment opportunities. To ensure that it can compete effectively, it needs the ability to borrow as its competitors can. Imposing a legislative cap on borrowing would likely place additional restrictions on the Crown Estate that its competitors in the private sector do not face. This would not be consistent with the Government’s vision for the Crown Estate: to ensure that it has flexibility to invest in activities that will drive increases in its revenues and, consequently, its returns to the public purse.

As set out in the Crown Estate’s original business case, which I have shared with noble Lords, the limit of 25% loan to value is consistent with its peers. I hope this demonstrates to noble Lords that these plans have been considered carefully.

Let me also be clear that any request by the Crown Estate to draw down on debt will be carefully considered by the Treasury in the context of the fiscal position and in line with our fiscal rules. As the Chancellor set out in the Budget, the Government have set out our robust fiscal rules alongside a set of responsible reforms to the fiscal framework to improve certainty, transparency and accountability. The stability and investment rules will put the public finances on a sustainable path while allowing the step change needed in investment to drive long-term growth.

I hope that these explanations are useful and reassure the House that the Crown Estate’s power to borrow will be carefully monitored and controlled within these parameters. I hope I have provided some clarity on the Government’s position and that as a result the noble Baroness, Lady Vere, feels able to withdraw her amendment.

[Baroness Vere of Norbiton (Con)]

My Lords, I am grateful to the Minister for his response and to the noble Baroness, Lady Kramer, although I am sorry to hear that she will not be able to support the amendment. Noble Lords will not be surprised to hear that I do not agree with her.

While I agree with the noble Baroness’s assessment of the documents that were published by the Minister—it was helpful to see the memorandum of understanding, the draft framework and the business case—that is not really the point, because they do not go far enough. Those documents can be amended by this or any future Government. As the Minister referred to, and as I tried to explain in my opening remarks, this is the original business case, but there is no business case that currently sets out what the relationship with GB Energy looks like and what it will do to borrowing.

GB Energy is going to invest billions of pounds. How much of that is going to come from GB Energy and how much from the Crown Estate? No one knows. It is important that we make sure that it is impossible for the Crown Estate to ramp up borrowing without at least some oversight from Parliament. The Minister said, “It’s okay—the maximum is 25%”, but of course this Government or any future Government can change that unilaterally.

The Minister mentioned that competitors somehow do not have any caps on borrowing. Of course they do; they are commercial businesses, so the caps on their borrowing will be set by their banks. If the Minister looks at the original business case that he shared with us, he will see that all the competitors sit around the same sort of level of loan to value.

To go back to the original point, this is a sensible, simple and reasonable amendment. It would put in place just two checks: first, whether the Crown Estate should be borrowing now, and up to 25%, with the assessment done on a new business case, including GB Energy; and, secondly, another check, at some point long in the future, if ever, should the Crown Estate ever want to go above 25%. I think our nation’s assets need that sort of protection, and I therefore wish to test the opinion of the House.

--- Later in debate ---

[Earl Russell (LD)]

My Lords, I rise briefly to speak to Amendment 2 in the name of the noble Baroness, Lady Vere of Norbiton. This simple amendment seeks that the chair of the Crown Estate commissioners be appointed by the Treasury Select Committee. On these Benches, this seems like a reasonably sensible idea. This is an important appointment and should have an adequate level of pre-appointment scrutiny.

I welcome the letter from the noble Lord, Lord Livermore, sent yesterday, pointing out the established process for the Cabinet Office and that this could be added to the pre-appointment scrutiny list. To our minds, that is a very sensible answer and a way forward. It is a way of resolving this issue. My only real question in relation to this is that the Minister says this will be done in “due course”. Can he give us a clearer idea of what he means by that? What is the timeframe?

Further to that, in relation to the amendment from the noble Lord, Lord Hain, calling for commissioners from individual countries to be appointed to the Crown Estate, I ask the Minister: will those appointments also be subject to this type of pre-appointment scrutiny?

I turn now to Amendment 14, also in the name of the noble Baroness, Lady Vere. It seeks to require the approval of His Majesty’s Treasury for the disposal of assets over £10 million, and the commissioners to inform the Treasury if assets over a value of £10 million are disposed of in a single year, then requiring the Treasury to approve of the disposal of those assets and to report that to Parliament within 28 days.

Again, the noble Lord, Lord Livermore, responded to this in his letter to all Peers yesterday, and we welcome that response. The Minister pointed out that this was a complicated matter, and that he would bring forward an amendment to address this concern. His engagement with that is welcome. This is an important issue—assets should not be disposed of by the Crown Estate without ministerial approval—but I seek further clarification from the Minister. When he says that this will be brought forward, will it be before Third Reading in this House? If it is not possible to bring that clarification forward before Third Reading, can the Minister give an undertaking that it will happen before Report in the other place?

On this amendment, our preference is that a compromise way forward is agreed. In fact, both amendments are matters that should be resolved without resorting to testing the opinion of the House.

[Lord Livermore (Lab)]

My Lords, I thank all noble Lords for their contributions to this debate. First, I would like to address the points raised by the noble Lord, Lord Young of Cookham. I thank him very much for his engagement on this issue since Committee. I am also extremely grateful to him for raising the issues around the law relating to ownerless land and the process of escheat. It is a legally complex area and long overdue for reform. As a result of his intervention, Treasury officials are now engaging with the Law Commission on options for longer-term reform.

On the specific issues raised by the noble Lord, I am grateful to him for meeting with me, Treasury officials and the Crown Estate after Committee to discuss his specific concerns in detail. At the meeting we gained useful clarity that in cases of escheat the Crown Estate follows the valuation formula set out in the Leasehold Reform, Housing and Urban Development Act 1993, as he said.

As the noble Lord requested in Committee, I have agreed to update the framework document that governs the relationship between the Treasury and the Crown Estate to make this clear. The addition in paragraph 7.2 will set out that the commissioners have a responsibility to ensure that all public undertakings given on the Crown Estate’s behalf by Ministers in Parliament are met. I have raised the noble Lord’s suggestion about the specific accounting change with the Crown Estate and will follow up in due course.

Amendment 2, tabled by the noble Baroness, Lady Vere, would require scrutiny by the Treasury Select Committee, or any successor committee, of future chair appointments before the appointment can be made. She spoke persuasively on this in Committee, and I agree with many of the points she raised. For this reason, I am happy to confirm that the Treasury will work with the Cabinet Office to add the role of chair to the official pre-appointment scrutiny list. This will be in accordance with the already-established process by which significant roles, such as this, are added to the Cabinet Office’s pre-appointment scrutiny list. As I have set out, I will be very happy to update noble Lords in due course. The noble Earl, Lord Russell, asked when that will be. I will come back as soon as I have relevant information. We are already working with the Cabinet Office, and I do not envisage there being a significant delay.

--- Later in debate ---

Moved by

[Lord Livermore]

3: After Clause 2, insert the following new Clause—
“Annual reportsIn section 2 of the Crown Estate Act 1961 (reports and accounts), after subsection (1) insert—“(1A) The annual report for a year in which a partnership between the Commissioners and Great British Energy is in operation must include a report on—(a) the activities of the Commissioners during the year under that partnership, and(b) any effects or benefits experienced during the year which were the result of activities of the Commissioners under that partnership.”” Member’s explanatory statement
This amendment would require the Commissioners to include in their annual reports a summary of the things done, and of any effects or benefits or effects resulting from things done, under any partnership between themselves and Great British Energy. The duty will only apply in relation to a year in which such a partnership was in operation.

--- Later in debate ---

[Lord Livermore (Lab)]

My Lords, I will address other noble Lords’ amendments in this group during my closing speech, after listening to the debate.

I have listened to the arguments and concerns put forward at Second Reading and in Committee by the noble Baroness, Lady Vere, on how the new partnership between the Crown Estate and Great British Energy will work and the difference it will make. The Crown Estate is of course keen to ensure that details of this partnership are publicly available on an ongoing basis, and the Government therefore propose an amendment to require the Crown Estate to include, in its existing annual report, a report on the activities of the commissioners during that year under the partnership with Great British Energy, and any effects or benefits during that year resulting from activities of the commissioners under the partnership.

I am grateful to the noble Baroness, Lady Vere, for her engagement on this matter, and to other noble Lords who have raised similar concerns, and I trust that this amendment meets those concerns. I hope that noble Lords feel able to support this amendment as a result. I beg to move.

[The Earl of Kinnoull (CB)]

My Lords, I will speak to Amendment 5, which stands in my name. I thank the Minister and his Bill team for their time in what is always the busiest period of the Treasury’s life. He was happy to give time, and I am very grateful for that and for the sensible discussion that we had.

The amendment is designed to be the gentle pencil in the back, as I put it in Committee, in order that the Crown Estate Scotland be afforded the same freedoms and flexibilities that the Crown Estate will have following the passage of the Bill. I described in Committee how the Crown Estate Scotland had advised me that the Scottish Government were keen that it has those. I know that the UK Government are keen that it does so, as is the Crown Estate itself.

There are many opportunities for collaboration, particularly for energy projects in the North Sea at the moment, but there will be other opportunities as well for aquaculture. There is the ability to copy the good and avoid the bad, given that a number of copycat transactions might be done using Crown Estate property going forward. This is of course in all our interests, because ultimately this is very much part of the net-zero agenda, and the more the two Crown Estates can be aligned the better it will be for everybody in the long term.

The amendment is, as I said, a gentle pencil, designed to ensure that the UK entities do not down tools following the passage of this Act but carry on enthusiastically to ensure that Crown Estate Scotland benefits from the same freedoms and flexibilities. I therefore ask my only question of the Minister: does he share this aim of ensuring that those freedoms and flexibilities are afforded, and does he feel that this amendment is a proportionate way of going about it?

--- Later in debate ---

[Baroness Vere of Norbiton (Con)]

My Lords, I entirely agree with my noble friend Lord Forsyth. In tabling Amendment 5, the noble Earl, Lord Kinnoull, has hit upon something here; it is a report that would be worth doing. When I was having discussions about the Bill between Second Reading and Committee, I spoke to people in the port sector and they were very concerned that, if there is to be investment in ports in one part of the country, that investment should be equally likely to happen in another part of the country—namely, Scotland. It is an important opportunity, and I am sure that the Minister will respond in a positive fashion, as far as he can.

Turning to government Amendment 3, I am grateful to the Minister, who listened to concerns from all sides of the House about ensuring that sufficient information is forthcoming about the relationship between Crown Estate and Great British Energy. I am somewhat disappointed that we never saw the partnership document. I still suspect that that is because it does not exist, so I am not entirely sure what the partnership is; but let us put that to one side. I am looking forward to seeing information come through on the results of this partnership as we go forward.

I note what the noble Earl, Lord Russell, said about the intention behind his Amendment 8. Any noble Lord who has looked at the Crown Estate annual report will know that it is already quite detailed, and I appreciate that a lot of work has been put into sharing information about the organisation with stakeholders. I suspect that his amendment is too detailed to be wholly useful, but I am sure that he has picked out various elements that the Crown Estate will no doubt take note of and include in future reporting.

[Lord Livermore (Lab)]

My Lords, I thank all noble Lords for their contributions to this debate. Let me once again say that I am particularly grateful to the noble Baroness, Lady Vere, for her constructive engagement prior to today in relation to Amendment 3, tabled by the Government. It is important that certain details on the partnership between the Crown Estate and Great British Energy are publicly available on an ongoing basis, and I trust that this amendment meets the concerns raised on this matter by the noble Baroness and others across this House.

Amendment 8, tabled by the noble Earl, Lord Russell, would create a new reporting requirement on the Crown Estate commissioners, requiring them to publish an annual report, to be sent to the Environmental Audit Committee of the House of Commons, which must consider the commissioners’ activity in the contribution to supporting local communities and economies, the achievement of the United Kingdom’s climate and environmental targets, the relationship with Great British Energy, a just transition to green energy, a jobs and skills transition into the green economy, the promotion of animal welfare in aquaculture on the Crown Estate, the protection of the foreshore on the Crown Estate and the protection of the seabed in the Crown Estate. It would also require the commissioners to appear before the Environmental Audit Committee if requested.

I thank the noble Earl for his constructive engagement on this matter prior to today. I agree with him that these are important areas and, as a result, we have agreed with the Crown Estate that we will make a further update to its public framework document to clarify that its annual report must continue to include a report on the Crown Estate’s activities in terms of sustainable development, covering the impact of its activities on the environment, society and the economy.

It is important that this Bill stands the test of time and that, as new, relevant areas of concern on the environment, society and the economy emerge over the coming decades, these are covered in the Crown Estate’s annual report too. The proposed changes to the framework document, which also directly address other concerns, have been made deliberately broad in an attempt to cover the wide range of specific concerns the House has raised, including those raised by the noble Earl. On Great British Energy specifically, as I have set out, the Government have also now tabled an amendment that creates a reporting requirement for the Crown Estate to cover in their existing annual report a summary of its activities in relation to Great British Energy.

I turn next to Amendment 5, tabled by the noble Earl, Lord Kinnoull. This amendment would require a report to be laid before Parliament within 12 months of the day on which this Act is passed, assessing any differences between the provisions made by this Act for the management of the Crown Estate in England and equivalent provisions for the management of the Crown Estate in Scotland. I am grateful to the noble Earl for his engagement on this matter. He has also raised specific concerns about ensuring that the Crown Estate and Crown Estate Scotland are in analogous positions should this Bill pass.

As I set out in Committee, Section 36 of the Scotland Act 2016 inserted a new Section 90B into the Scotland Act 1998. Subject to certain exceptions, Section 90B provided for the devolution in relation to Scotland of the commissioners’ management functions relating to property, rights or interests in land in Scotland, and rights in relation to the Scottish zone. Devolution occurred on 1 April 2017 under, and in accordance with, the Crown Estate Transfer Scheme 2017. The relevant property, rights and interests are now managed separately by Crown Estate Scotland under the Crown Estate Scotland (Interim Management) Order 2017 and the Scottish Crown Estate Act 2019, as enacted by the Scottish Parliament. They do not form part of the Crown Estate as currently managed by the Crown Estate commissioners.

I share the noble Earl’s commitment in this area, and I would like to make that clear. The Crown Estate and Crown Estate Scotland hold similar operational priorities, and, naturally, the chief executives of both organisations must be, and are, in regular contact. There is also significant collaboration between the two organisations, for example on the offshore wind evidence and change programme, which is an initiative led and funded by the Crown Estate and in which Crown Estate Scotland is a key partner. The programme aims to de-risk and accelerate the delivery of offshore wind projects by funding research and data collection. Both organisations contribute to and benefit from research projects that address knowledge gaps and support the offshore wind consenting process. At a project level, Crown Estate Scotland was a partner in the predators and prey around renewable energy developments project. That focused on Scotland, particularly the Moray Firth and the Firth of Forth and Firth of Tay regions, but the project had broad relevance for the whole of the UK. The improved understanding gained from the project informs marine spatial planning and guides future offshore wind development.

The two organisations also share data on offshore activities through their partnership with the Marine Data Exchange, a digital platform established by the Crown Estate to provide a more comprehensive and integrated understanding of the UK’s seabed. Founded by the Crown Estate in 2013 as the first resource of its type, the Marine Data Exchange provides a world-leading digital platform for gathering and disseminating vital information on a wide range of offshore activities. It currently holds one of the world’s largest collections of freely available data relating to the seas around England, Wales and Northern Ireland and, thanks to the partnership with Crown Estate Scotland, is now extended to cover Scottish waters.

The two organisations also hold frequent discussions through the carbon capture utilisation and storage collocation forum, which is a collaborative effort run by the Crown Estate with input from Crown Estate Scotland and other stakeholders to explore the potential for collocating carbon capture and storage with offshore wind projects. If there are further areas of potential co-operation, I know that the Crown Estate will be more than willing to discuss them with its counterparts in Crown Estate Scotland. The Treasury is, of course, open to any request for a meeting from the Scottish Government and Crown Estate Scotland to discuss this Bill, and we are more than happy to share any policy thinking to help inform any changes they may wish to propose in the Scottish Parliament. I hope these explanations have been helpful and have provided some clarity on these points. I hope that the noble Earls, Lord Russell and Lord Kinnoull, will not press their amendments as a result.

Amendment 3 agreed.

--- Later in debate ---

[Lord Roborough (Con)]

My Lords, I declare my interests in the register as an owner of fishing rights and president of South West Rivers Association. I will also speak briefly, as the arguments have been well made by many noble Lords.

We have heard from noble Lords around the House that this is an important amendment that strikes at the heart of our care for the environment and animal welfare. It imposes reasonable obligations on the Crown Estate to take responsibility for environmental damage caused by salmon farming on its property, and for the welfare of the fish being farmed. As I understand it, there is only one salmon farm in our waters, off the coast of Northern Ireland, although there are 210 in Scottish waters. But this amendment will ensure that any future salmon farms are developed with those obligations in place.

In Committee, the Minister highlighted existing legislation and regulations that cover the salmon farming industry. However, given that the wild Atlantic salmon in our country is now on the IUCN red list, and given the sometimes dire conditions that farmed salmon are kept in, it is hardly surprising that my noble friend Lord Forsyth of Drumlean continues to press this amendment. We are disappointed that the Government have so far failed to see its merits, and we hope for a more constructive reaction from the Minister today. We on these Benches will support my noble friend if he decides to test the opinion of the House.

[Lord Livermore (Lab)]

My Lords, I am grateful to all noble Lords for their points. The amendment tabled by the noble Lord, Lord Forsyth of Drumlean, 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 also be required to make the same assessment of any applications for new licences for salmon farms and, where the commissioners determine that an application may cause environmental damage or raises significant animal welfare concerns, the Crown Estate must refuse the application.

The noble Lord, Lord Forsyth, again made a powerful speech on his amendment. As I noted in Committee and can repeat today, I wholeheartedly support the objectives behind it but I regret that the Government are unable to support it. I recognise that this is not what the House wants to hear, but it remains the Government’s position that this amendment would duplicate protections that already exist in legislation or that are required by regulators as part of the licensing process for aquaculture. I say to the noble Lord, Lord Douglas-Miller, that, like the noble Lord, Lord Forsyth, I have had no contact with the industry. I may have written to the noble Viscount, Lord Trenchard, following Committee, but, if not, I will absolutely ensure that I do.

All salmon farming in England is regulated with the intention to ensure that it is carried out in a responsible manner that respects the environment and protects consumer health and animal welfare. As noble Lords know and some have observed, the management of the Crown Estate in Scotland is a devolved matter. My officials have been in contact on this matter with the Scottish Government, who have said that it is their view that salmon farming is strictly regulated to ensure that the environment on which the aquaculture sector and others rely is protected for future generations. They have also stated that Crown Estate Scotland works to ensure responsible use of Scotland’s seas through leasing the seabed. However, as is proper, it is the role of local authorities and the Scottish Environment Protection Agency to conduct a thorough assessment of development proposals, including environmental impact assessments and habitats regulations appraisals, with advice from statutory and other consultees.

I am aware of the strength of feeling on this matter, and I recognise that many noble Lords will not agree with the case I have set out. However, I respectfully ask the noble Lord, Lord Forsyth, to withdraw his amendment.

--- Later in debate ---

[Lord Berkeley of Knighton (CB)]

My Lords, as someone who lives and farms in mid-Wales as well as writing music, I support this amendment. Living among people there, to me it seems that the comments we have just heard are very apposite. There is a feeling that we are slightly out on a limb and that, if devolution is to mean anything, this is a perfect example of where some empowerment could take place and, as the noble Lord, Lord Wigley, said, we could see a certain amount of money returned to Wales to help with the preservation of all those things that people value there, not least the coast and countryside. We are threatened with all kinds of things—possible massive pylon building and massive problems with the Wye, which has been coming up today in various amendments. To be able to decide for ourselves, or for the Welsh Government to be able to decide on our behalf, seems an extremely important point in this debate. Therefore, I very much support the amendment.

[Lord Livermore (Lab)]

My Lords, I am very grateful to all noble Lords who have spoken in this debate in response to the amendments from my noble friend Lord Hain and the noble Baroness, Lady Humphreys.

Turning first to Amendment 11, tabled by my noble friend Lord Hain with my noble friend Lord Murphy speaking on his behalf, I thank my noble friend Lord Hain for his constructive engagement on this topic and thank other noble Lords across the House who have spoken in favour of this amendment, which the Government support. The amendment requires that the board of Crown Estate commissioners must include a commissioner who is knowledgeable about Wales and that such a commissioner, alongside their existing responsibilities, must be responsible for giving advice about Wales to the board. It also requires equivalent positions for Northern Ireland and England and grants Welsh Ministers and the Executive Office in Northern Ireland the right to be consulted about the Welsh and Northern Irish appointments. These legislative requirements will ensure that the board of commissioners continue working in the best interests of Wales and Northern Ireland alongside their existing duties as commissioners. To answer the noble Baroness, Lady Humphreys, I say that I do not believe that the amendment in any way deliberately excludes the seabed.

I reassure the noble Lord, Lord Wigley, that the Crown Estate absolutely welcomes the opportunity presented by the increase in the number of commissioners from eight to 12, to bring knowledge of the devolved nations even more directly to the board table. It is an enthusiastic supporter of this amendment. This will supplement the expertise of its director for the devolved nations, who is based in the Crown Estate’s recently opened Cardiff office and whose knowledge and extensive local engagement over the last two years is evidence of the importance to which it attaches understanding local conditions in Wales.

The commissioner responsible for giving advice to the board on Northern Ireland will provide valuable insight as the Crown Estate’s engagement and activities in Northern Ireland continue to evolve. For example, the Crown Estate’s chief executive was in Belfast last month meeting officials and Ministers from the Department of Agriculture, Environment and Rural Affairs and the Department for the Economy. That form of engagement will move from strength to strength with the knowledge that such commissioners will offer to the board. These commissioners will certainly strengthen the Crown Estate’s ability and mission to deliver benefit for the whole UK at a time when devolution of the estate would significantly risk fragmenting the energy market, which would undermine international investor confidence and delay the progress towards net zero by an estimated 10 to 20 years, to the detriment of the whole UK.

Amendment 6, tabled by the noble Baroness, Lady Humphreys, would require the Treasury to complete a transfer of the responsibility for the management of the Crown Estate in Wales to the Welsh Government. As I have set out previously, the Government’s position is that there is greater benefit for the people of Wales and the wider United Kingdom in retaining the Crown Estate’s current form. As I set out in detail in Committee, the Crown Estate Act 1961 requires the Crown Estate commissioners to manage the Crown Estate as a commercial enterprise and with due regard to the requirements of good management. While the Crown Estate has goals which, under its own strategy, align with wider national policy objectives, the 1961 Act provides the Crown Estate with independence and autonomy to set and achieve its goals. It has shown itself over the last 60 years to be a trusted and successful organisation with a proven track record in effective management.

The Crown Estate is required to place profits into the UK Consolidated Fund each year, worth more than £4 billion over the past decade. This enables those revenues to fund UK government spending in reserved areas in Wales and Northern Ireland and supports the funding provided through the block grant. Those revenues are then allocated to public service priorities by the Government, subject to the usual parliamentary controls. As I have noted previously, that is a valuable outcome which we must be careful not to undermine. Devolving the Crown Estate to Wales would, as I have explained, most likely require the creation of a new entity to take on the role of the Crown Estate in Wales. As I have previously set out, this entity would not benefit from the Crown Estate’s current substantial capability or capital and system abilities, nor benefit from the Crown Estate’s marine investments currently being made on a portfolio-wide basis across England and Wales. To devolve to Wales would disrupt these existing investments, since they would need to be restructured to accommodate a Welsh- specific entity.

I will not repeat the examples that I gave in Committee, but it remains the point that to devolve at this time would risk jeopardising the existing pipeline of offshore wind development in the Celtic Sea, planned into the 2030s, and the vital investment and jobs that this would bring across south Wales. As I noted in Committee, in addition to energy, the extensive jobs and supply chain requirements of the round 5 offshore wind opportunity in the Celtic Sea would also likely deliver significant benefits for Wales and the wider UK. As I mentioned in Committee, an advisory firm to the Crown Estate estimated that manufacturing, transporting and assembling the wind farms could create around 5,300 jobs and a £1.4 billion boost for the UK economy.

Devolution would also delay UK-wide grid connectivity reform. For Wales, the Crown Estate is working in partnership with the energy system operator to ensure that its current pipeline of Welsh projects, the biggest of which is round 5—which is expected to contribute enough energy capacity to power 4 million homes across the United Kingdom—can benefit from this co-ordinated approach to grid connectivity up front. Introducing a new entity, which would have control of assets only within Wales, into this complex operating environment where partnerships have already been formed, would not make commercial sense. A devolved entity would be starting from scratch midway through a multi-million-pound commercial tendering process when the Crown Estate is undertaking critical investment in the UK’s path towards net zero. I therefore respectfully ask the noble Baroness, Lady Humphreys, to withdraw her amendment.

[Baroness Humphreys (LD)]

I thank the Minister for those comments and everyone who has spoken in this debate, especially those who have supported the devolution of the Crown Estate to Wales. I was looking for a little more from the Minister about the responsibility of the commissioners. It seems that they are there to give advice, but there is no responsibility to report to Welsh Ministers or to discuss with them, which I hope that they will do in any case.

--- Later in debate ---

[Baroness Vere of Norbiton (Con)]

I rise only briefly to say that we on these Benches want to see the Crown Estate taking action to improve our environment, and we share the concerns of other noble Lords in this area. We note that the Government have expressed their support for the amendment in the name of the noble Baroness, Lady Hayman. I agree with her that it is all about outcomes in these circumstances. We agree that this is a sensible amendment and that it deserves the Government’s support.

[Lord Livermore (Lab)]

My Lords, I am very grateful to all noble Lords who have spoken in this debate in response to the amendments tabled by my noble friend Lady Young of Old Scone and the noble Baroness, Lady Hayman. Before I respond to the amendments relating to the environment, I reaffirm my strong support for the intention behind them. As I set out in Committee, it is right that the public and private sectors make every contribution they can to achieving our climate change targets. The Crown Estate should continue to be a national trailblazer in this regard.

The Crown Estate’s commitment to becoming a net zero carbon business by 2030, aligning with a 1.5 degree trajectory, and its commitment to prioritising activities that help enable a reduction in a national carbon emissions, such as building net-zero homes, transitioning its holdings to sustainable agricultural practices, and working in partnership with government to meet the national renewable energy targets, speaks to how seriously it is already committed to these goals.

--- Later in debate ---

[Earl Russell (LD)]

My Lords, it is quite late and we have run over our time, so I will be brief with this amendment. To be honest, my plan was never to call it to a vote. This is an amendment that I tabled at previous stages of the Bill. It calls on the commissioners to do two things: to establish a regional wealth fund and a skills training fund. I believe that both are important. That is why I have brought this amendment back today. As I said, I will speak to it very briefly.

On the regional wealth fund, we are going through one of the biggest energy transitions that this country has experienced since the dawn of the Industrial Revolution. A lot of stuff needs to be built; a lot of change is coming. The Government need to take people with them on that journey. It is not for Whitehall and central government to do this to people. It is for this Government to do things with people, for people, and to take people with them on that journey. I say these things because they are important. We on these Benches want to see Labour succeed in these missions. If public support wanes, that will not happen.

I believe also in devolution; we believe in devolution on these Benches. We believe that local communities should benefit from the energy that they host, and from the infrastructure that sits in their communities. We believe very much in community energy as well. In legislation to come, we will have GB Energy. From these Benches, we will be pushing the Government strongly to go further on community energy. We think it is an important part of the puzzle that can be achieved within the GB Energy Bill.

I move on finally to skills and training. The green revolution is a revolution; it will change all our lives. It offers real opportunities, not just to decarbonise and meet our climate commitments but for Britain to grow new industries to be new world leaders and to train people to take on new jobs, the jobs of the future, which we need to grow our economy.

The Budget this week, for all the investment, had very little growth coming out of it. I personally worry that there was very little money in the Budget for skills and training. The year 2030 will be here in a blink of an eye. To meet our targets, we need people to be able to build all this stuff, to make this thing happen; otherwise, our targets will not happen and will not be met.

The Crown Estate sits at an important juncture between the big industries and the local communities. It is already doing a very good and imaginative job in this area. I simply call on the Government to do more: to work with the Crown Estate to help create these skills; to help support our local communities; and to help bring people with them and alongside them on this journey, so that we can all transition together. I beg to move.

[Lord Livermore (Lab)]

My Lords, I will respond to Amendment 9 tabled by the noble Earl, Lord Russell, on the topic of local and community benefits. As I set out in Committee, the Government are committed to working closely with the Crown Estate to support our target of clean power by 2030 by collaborating to accelerate and derisk the sustainable delivery of technology such as offshore wind. As I noted in Committee, local communities already benefit from onshore and offshore developments in the form of the economic benefits that such developments bring, including job creation and increased business for local suppliers. Individual developers also contribute to local initiatives.

Over the longer term, local communities will also benefit as we accelerate our transition away from volatile fossil fuel markets to clean, homegrown power to boost Britain’s energy independence and security. The Crown Estate has also specifically designed the leasing process for the offshore wind leasing round 5 opportunity in the Celtic Sea in such a way that developers have to make commitments to deliver social and environmental value as part of the development of their new windfarms.

I turn to the second part of the amendment, on a skills training fund. As I have previously made clear, the Government of course support the spirit behind the amendment. We are committed to clean energy by 2030, accelerating to net zero and promoting biodiversity. To meet those ambitions, we need to make sure that our workforce has the knowledge and skills to succeed in the green economy, both now and in future.

As part of that effort, the Department for Education has set up Skills England, a new body that will tackle skills shortages and support sustained economic growth. The Government also introduced the Institute for Apprenticeships and Technical Education (Transfer of Functions etc) Bill in this House last week, which among other things will help to support the establishment of Skills England. As I highlighted in Committee, the Crown Estate is dedicated to supporting skills and training.

As I have said previously, the Crown Estate consults extensively with communities, charities, businesses and the Government to ensure that its skills initiatives are sensitive to market demands and emerging technologies to keep them relevant and effective. The Government consider it important that the Crown Estate retains that flexibility in how its skills initiatives are funded and delivered to ensure that it can contribute to skills training in the best possible way.

I hope these explanations have been helpful and I have provided some clarity on the points raised. I hope the noble Earl, Lord Russell, feels able to withdraw his amendment as a result.

[Earl Russell (LD)]

My Lords, I thank the Minister for his response. I am of course able to withdraw my amendment. I recognise the work that the Government are doing in these areas, but there is a need for more to be done. I do not think that working with the Crown Estate would impact other work; it would actually strengthen it. As I said, it sits in a unique juncture that would be particularly helpful in bringing industry together with communities to create local jobs and provide training. However, I note the work that the Government are doing and I thank the Minister for his response. I beg leave to withdraw the amendment.