(2 weeks, 5 days ago)
Public Bill CommitteesI beg to move amendment 1, in clause 3, page 2, line 17, at end insert—
“(3B) In keeping the impact of their activities under review, the Commissioners must have regard to—
(a) the United Kingdom’s net zero targets;
(b) regional economic growth; and
(c) ensuring resilience in respect of managing uncertainty, risk and national security interests.”
This amendment would require the Crown Estate Commissioners, in reviewing the impact of their activities on the achievement of sustainable development, to have specific regard to the United Kingdom’s net zero targets, regional economic growth, and resilience in respect of managing uncertainty, risk and national security interests.
With this it will be convenient to discuss the following:
Amendment 6, in clause 3, page 2, line 17, at end insert—
“(3B) In complying with the duty under subsection (3A), the Commissioners must—
(a) set and publish sustainable development objectives in relation to their activities,
(b) take all reasonable steps to meet these objectives, and
(c) have regard to the relevant environmental legislation for the UK, England, Wales and Northern Ireland in relation to making these objectives.
(3C) For the purposes of subsection (3B), ‘relevant environmental legislation’ includes—
(a) the Climate Change Act 2008,
(b) the Environment Act 2021,
(c) the Well-being of Future Generations (Wales) Act 2015, and
(d) the Environment (Wales) Act 2016.”
This amendment would require the Commissioners to set sustainable development objectives for their activities, having regard to the Climate Change Act 2008, Environment Act 2021, Wellbeing of Future Generations (Wales) Act 2015 and the Environment (Wales) Act 2016.
Amendment 8, in clause 3, page 2, line 17, at end insert—
“(3B) Any framework document published by the Chancellor of the Exchequer, the Crown Estate and the Commissioners must define ‘sustainable development’ for the purposes of this Act.
(3C) The definition under subsection (3B) must include reference to a climate and nature duty.
(3D) A ‘climate and nature duty’ means a duty to achieve any targets set out under Part 1 of the Climate Change Act 2008 or under sections 1 to 3 of the Environment Act 2021.”
This amendment would ensure that this act’s Framework Agreement must define “sustainable development”, and that the definition must include reference to a climate and nature duty.
It is a pleasure to serve under your chairmanship, Ms Furniss, and to speak to this amendment. Its intention relates to the additional funds that the Crown Estate will be able to unlock—something I welcome to improve investment in the country, rather than it being tied up by coming back into the Treasury to then be redistributed. It aims to ensure that there is an arrangement for funding from the Crown Estate, in projects and activities that it is already engaged in, to support the local regions where those are taking place.
It does not seem to me unreasonable that consider- ation should be given, as part of the Crown Estate’s considerations, to the UK’s net zero targets, as is expected of other organisations. Net zero is one of Government’s key missions, so to have some sympathy and some similarity in the way that organisations are expected to conduct themselves in relation to their overall objectives seems straightforward.
The amendment also adds the gentlest of additional check-ins for the Crown Estate to ensure that those wider community benefits that have the opportunity to generate lasting change in coastal communities are part of the Crown Estate’s considerations. There are so many benefits from this Bill—it is very welcome for that reason—and they should be specifically included.
The Crown Estate, until now, has made decisions on the leasing of the seabed based mainly on price and cost and nothing else. This Bill will change that by asking commissioners to “keep under review the impact of their activities on…sustainable development”.
Amendment 1 simply clarifies “sustainable development” and slightly expands on what that means for, for example, net zero targets and economic growth. I ask the Minister to consider that and to assure us that that is what the Bill is intended to do, and that it will be the progress and direction of the Crown Estate.
As I mentioned, the definition of “sustainable development” will be published on Royal Assent. Perhaps we can return to any questions that the hon. Member may have on that definition at that point.
The fundamental point that I am seeking to make is about ensuring that the Crown Estate can operate effectively. By having clear and focused priorities, it will operate more effectively than having too many objectives, which end up meaning overall that it will perform less well in the public interest. As I have noted, the Crown Estate is a commercial business. It is independent of Government and operates for profit. Although it has goals that, under its own strategy, can align with national policy objectives, fundamentally, the 1961 Act grants the Crown Estate independence and autonomy.
The Government have accepted the amendment to require the commissioners to keep under review the impact of their activities on the achievement of sustainable development. However, expanding the Crown Estate’s core purposes in legislation, in particular with additional duties or objectives that may unnecessarily complicate or conflict with the achievement of the core commercial objective, would risk undermining that core objective being achieved.
Any actions that undermine the core commercial objective risk undermining the very funding that is used to support environmental and other policy objectives. The Government believe that the Crown Estate should continue to operate in this way—as a commercial business, independent of Government—because it has shown itself to be a trusted and successful organisation, with a proven track record and effective management.
As I noted, the Crown Estate is already a trailblazer in its efforts to tackle climate change and support the environment, and it is required to pay its profits into the UK Consolidated Fund each year. Furthermore, I confirm that the requirement under amendment 8 for any framework document between the Treasury and the Crown Estate to define sustainable development has already been agreed by the Government.
As confirmed on 5 November on Report in the other place, the public framework document that exists between the Treasury and the Crown Estate will be updated in the light of that amendment to clarify that “sustainable development” means regard for the impact of the Crown Estate’s activities on the environment, society and the economy. It will also make it clear that that regard includes, where relevant, consideration of relevant legislation, such as part 1 of the Climate Change Act 2008, which deals with the targets set for 2050, and section 56 of the Climate Change Act and sections 1 to 3 of the Environment Act 2021, which also deal with specific environmental targets. The framework document will also make it explicit that the Crown Estate will include in its annual report a report of its activities in relation to sustainable development. For those reasons, I trust that hon. Members will be able to withdraw their amendments.
I do not intend to press the amendment to a vote. I accept the point about the Crown Estate being a commercial business, but I am less persuaded that it is unable to cope with an additional objective. When I think about other organisations in the public sector and the number of objectives that we set for them, I am fairly sure that a commercial business has the wherewithal to be able to manage that. However, I accept the potential for an impact on the returns of that commercial business. The Minister has given indications regarding the annual report, and I hope that he will have heard today the determination of Members from coastal communities and the importance of this to them. He will be aware of the strength of feeling about the necessity of ensuring that we have real delivery and community benefits from the extended powers and facilities that we are providing to the Crown Estate.
We will not press the amendment to a vote, but, when it comes to accountability, we know where the Minister’s door is and I am sure we will happily knock on it should the need arise.
We have received assurances that we will have the chance to discuss the sustainable development definition at the time of Royal Assent and that the framework document will pay due regard to climate and nature duties in relation to our targets for 2050 under the Climate Change Act and to our nature restoration duties under the Environment Act; that is good. I urge the Minister to consider that it is an economic choice to consider climate and nature up front, not only that we then raise the money to provide for environmental funding post operation. That is something that we should all embrace, in particular in the Treasury.
I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Before we come to amendment 9, I impress on the Committee that this is grouped for debate only with new clause 10. Clause stand part will be debated next.
(2 weeks, 5 days ago)
Public Bill CommitteesNew clause 2 relates to the seabed, which is obviously an important asset held by the Crown Estate. Specifically, the clause will prevent the Crown Estate from selling the seabed without obtaining consent from the Treasury. During the Bill’s time in the other place, there was significant interest in the ability of the Crown Estate to dispose of unique national assets such as the seabed.
It will be no surprise to the Committee that the law on the ownership of the seabed is incredibly complex. As such, the Financial Secretary to the Treasury committed to explore the matter further and, if required, to bring forward a legislative provision to restrict the Crown Estate’s ability to sell the seabed.
I am pleased to say that the clause delivers on the commitment made by the Financial Secretary by putting special protections in place for the seabed. It does that by requiring the Crown Estate commissioners to obtain consent from the Treasury before they permanently dispose of any part of, or the Crown Estate’s interests in or rights and privileges in relation to, the territorial seabed.
Could the Minister give examples of when the Crown Estate might consider selling the territorial seabed?
I will come in just a moment to some of the scenarios that the new clause might cover.
As I said, the new clause ensures that the Crown Estate commissioners must obtain consent from the Treasury before they permanently dispose of any part of, or the Crown Estate’s interests in or rights and privileges in relation to, the territorial seabed. To be clear, that does not mean that the Crown Estate could never be permitted to dispose of a seabed. To answer my hon. Friend’s question, national or local interests may be best served by such a sale, including, for example, to another part of the public sector to enable local infrastructure development. Any such sale could, under these measures, take place only with the agreement of Ministers, and it is right that they are decision makers on such sales.
I should also make it clear that the clause would not fetter the Crown Estate’s existing right to agree licences or leases in relation to the seabed, which by definition do not represent a permanent disposal of the asset. The ability to agree long-term licences and leases for the seabed will continue to be an important feature of the Crown Estate, to attract significant investment needed for offshore clean energy developments.
New clause 3, tabled by the hon. Member for North West Norfolk, seeks to limit the ability of the Crown Estate to dispose of assets without Treasury approval. Specifically, it would require the Crown Estate to seek consent for the disposal of assets totalling 10% or more of its total assets in a single year, and that the Treasury lay a report before Parliament within 28 days of being notified of disposals above that threshold.
The Government’s view is that 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 Bill. There may be instances where it makes commercial sense to dispose of high-value assets, particularly when the Crown Estate takes a long-term view of the business and its strategy.
I recognise that the new clause would not prohibit disposals above the specified limit, but would require the Crown Estate to obtain Treasury approval. However, as I have set out for the Committee, 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.
However, I do understand that there may be concerns about the Crown Estate’s ability fundamentally to change the nature of the estate. I reassure the hon. Member that the core duty of the Crown Estate—to maintain an estate in land and to enhance and maintain the value of that estate—is unchanged by the Bill. I hope that that provides the appropriate reassurance and that he feels able not to press new clause 3.
The Government are thankful for the constructive engagement of the Opposition on the matter of disposals. That has led to special protections being put in place for the seabed. I therefore commend new clause 2 to the Committee.
(1 month ago)
Commons ChamberIt is right that we take a robust approach to money laundering, and we have a tailored approach to cash deposit limits to reflect the differences in needs and risk profiles across businesses’ customer bases. I am committed to working with the Financial Conduct Authority and others to ensure we strike the right balance—one that allows businesses to continue their operations but also ensures that we assess the risk posed by those who might be using their businesses to launder money.
What additional support can the Government offer to Customs and Excise, local authorities and police forces in gathering supporting evidence that can then be provided to His Majesty’s Revenue and Customs? High street money launderers are brazen fronts for significant criminal enterprises.
We take this issue very seriously. The Treasury owns the money laundering regulations, but the FCA has a key role as a major supervisor, and we work very closely with the criminal enforcement agencies. Of course, those agencies are independent, but we are absolutely committed to clamping down on money laundering.
(1 month, 2 weeks ago)
Commons ChamberThat is a great question. I have no idea, so I will commit to writing to the right hon. Gentleman with an answer, if he will forgive me for not knowing.
I might be able to help a little with the question asked by the right hon. Member for Orkney and Shetland (Mr Carmichael). The Crown Estate has engaged in supporting the evidence and change programme that has brought the fishing industry and the renewables sector around the table to enable earlier planning to prevent some of the conflicts we have seen. My speech will highlight some good examples of where those plans and the evidence and change programme have started to be implemented. The industries are working together, hand in hand, to prevent the kind of conflict about which the right hon. Gentleman is rightly concerned.
I am grateful to my hon. Friend for her help, which I hope gives the right hon. Member for Orkney and Shetland (Mr Carmichael) some reassurance, as it sounds eminently sensible.
I will speak about the Crown Estate’s borrowing powers and the broadening of its investment scope. These changes are intended to enhance the Crown Estate’s capacity to support our ambitious goals for renewable energy, nature recovery and economic growth. The Bill is undoubtedly a significant step forward in enabling the Crown Estate to play a greater role in the transition towards net zero. I fully support its efforts and ambitions.
The partnership between the Crown Estate and Great British Energy to develop offshore wind projects is exciting. Many of us have been trying to get Great British Energy to include community benefits and community ownership within its reach, but we have failed to do so. [Interruption.] It does? Okay—we have tried hard. A measure is to be considered in the other House on 13 January to try to get it to do that, so perhaps Labour Members know something that I do not. Anyway, that is good news.
I want to focus on a critical element that is close to my heart, and perhaps even more familiar to my colleagues, as I bang on about it. That subject is, of course, community benefits. Those of us in remote and rural Britain pay far more for energy than those who can access mains gas, and we also have a much higher level of poverty; especially fuel poverty. Communities hosting renewable energy projects, and particularly those overlooking offshore wind farms, deserve to see tangible benefits from those developments. The Bill presents an opportunity to ensure that offshore wind farm projects—indeed, all renewable energy projects—not only meet our national and global ambitions but provide meaningful real-world advantages to the people most impacted by them.
There are numerous examples from overseas of where community benefits have become significant. One such example is from Germany, where in the North sea archipelago of Heligoland three offshore wind farms generated €22 million in 2016. These are massive amounts of money. While the Bill’s focus is on increasing borrowing powers and investment flexibility, there is no mention of how communities will benefit from these developments, although perhaps Labour Members know something that I do not.
Is the hon. Member aware of the example of Ørsted, which has just given £1 million to the Horizon Youth Zone to support all young people across the Great Grimsby and Cleethorpes constituency and further afield with new activities and free mentoring and support outside school hours? Not only that; it sponsors local fun runs. RWE, another company operating in my constituency, is supporting education activities. Both those companies are not only employing masses of people but engaging with schools to support young people to have the skills and talents to come and work for them. That is the reality of community benefit.
Funnily enough, as a Highland councillor, it is a subject that I have spent many years working on. Highland council—I know this does not relate to the Crown Estate in England and Wales—had £9.1 million of community benefits and Scotland as a whole had £23 million. This is an industry worth hundreds of billions of pounds across the whole of Britain, so we should have, say, 5% of that as community benefits, which would be transformational for Cornwall, Devon, Pembrokeshire and indeed Scotland. I encourage the House to consider how the Bill could establish a robust framework for community benefits that could serve as a model for renewable energy projects across the whole of the UK, working closely with the Scottish Crown Estate.
The Bill represents a vital step forward in enabling the UK to meet its net zero targets and enhance energy security. However, it is equally vital that we legislate to include statutory powers for the Crown Estate in England and Wales, and indeed in Scotland, to ensure that these transformative projects see their fair share of community benefits for communities.
I welcome the Government’s proposed powers to enable the Crown Estate to drive greater investment in the country’s future to boost energy security, nature recovery and economic growth. It should be allowed to access private sector funding to expand and get the greatest benefit possible from its access to financing, and not retreat to markets having to survive on their own and not delivering, or recourse to the public sector for critical funding to grow industries.
I want to focus on clause 3, which deals with sustainable development, and to pick up some of the comments that were made in Committee in the House of Lords. My constituency is at the forefront of the delivery of practical skills in the day-to-day operations and continued maintenance of the offshore wind sector, and my constituents benefit from apprenticeships, introductory training, continuous professional development and, critically, long-term, well-paid employment in the sector. The Bill has the potential to open up possibilities for broader community engagement through the promotion of various educational opportunities in numerous workstreams.
Having worked with the Crown Estate in a previous role before returning to this place, I must say that I have had a slightly different experience from my hon. Friend the Member for Mid and South Pembrokeshire (Henry Tufnell). I know that in recent years the Crown Estate has sought to expand the areas of work in which it actively engages, and has provided immense support for the renewables sector. We should bear in mind that there has been a collective understanding—not just within our Government—that for energy security purposes we must, as a minimum, look at renewable energy sources to supplement our other energy sources as we progress, and as we view the global economics and the changing impact of the energy industry and the way in which others are maximising this change to encourage wealth into their countries.
We know that not just the present Government but Governments around the world, and previous Governments in this place, have recognised that we should accept and embrace this move, seeing it not as something divisive or prohibitive to other sectors but as something that will be the mainstay of this country. Simply objecting to it and saying no will not help to move things forward. We should be working together, as I think the renewables sector has been endeavouring to do and has been enabled to do in a much stronger way through the partnership that the Crown Estate has facilitated, to unite the many different relevant parties in seeking appropriate solutions to some of the most testing and challenging issues that the industry faces, including people and skills, environmental impacts and derogations, the unlocking of the UK supply chain, spatial squeeze, offshore asset security—which has not been discussed today—and aviation impact, which has not been referred to either. The Crown Estate has played a critical role in ensuring that the voices are heard in each of the areas where this new industry is having an impact—and it is having an impact, as I think the industry itself recognises—in the knowledge that this must be done in collaboration and co-operation with the other existing organisations, industries and operators in those sectors.
Through the evidence and change programmes, it became clear to everyone involved, including those who might have been less than happy that a new industry was making things different and challenging in certain circumstances, that the earlier these issues were considered as part of the Crown Estate’s planning and scoping, the easier it was to fulfil the existing and basic expectations of both the Crown Estate and the renewables sector from a Government perspective. Earlier consultation and partnership working on common difficulties and challenges meant that agreeable solutions were found earlier, and it was then possible to build acceptable frameworks for future use. Some of that is in evidence now, in the context of the Celtic sea developments and the fishing communities in those areas.
The right hon. Member for Orkney and Shetland (Mr Carmichael), who is my co-chair on the all-party parliamentary group on fisheries, rightly raised the issues and concerns that the fishing communities will have. However, in Committee in the Lords, there was a conversation about the regional wealth funds that the Bill will create. It seems to me that there is a prize opportunity for support and training for the fishing industry, to make it work alongside the renewables sector and to look at the opportunities that will come from the decarbonisation happening in that sector when it comes to offshore vessels and flexibility of service, so that a fishing vessel is not just a fishing vessel. Can it be used for multiple purposes? Can it be used for surveys? It can, because fishing vessels are already being used for surveys. There is an opportunity for the Bill to support those other industries, and we should not lose sight of that.
With these new ways of working, there is a great opportunity to expand the level of knowledge and understanding of the sector, to be able to teach the next generation of young people about how things really work in practice. To date, that has been a bit more experimental, I think it is fair to say, but because the sector is maturing and all the organisations involved have become more experienced, there is much more collective learning, and there are clearer lines of guidance that the Crown Estate has a definitive interest in ensuring a wide and common understanding.
I would like to focus on the people and skills area of work, which the Crown Estate has had some engagement in. There is an acceptance that the workforce will grow and needs to grow substantially. For areas such as mine and other coastal communities, ensuring that we have a skilled workforce ready to go is imperative. It is much more effective to ensure that people have the skills to get the jobs to earn their own way and have some pride in their life, working in an industry they are proud to be working in, than to simply rely on other community benefits that may well be short-lived and do not have the long-term impact that growing a brand-new industry around the country delivers. We know that the workforce will need more than three times its current numbers—I had written in my speech “over the next decade”, but I do not think that is true; actually, it is over the next half a decade, which is hardly anything at all—to meet the needs of the industry, and that is across all the different areas I mentioned such as environmental impact and aviation.
May I come back to the community benefits, which the hon. Member brought up in her intervention on me? The community benefits will be hundreds of millions for 25 years or the life of the project. It will be absolutely transformational to the most rural parts of Britain; it is not just something that will come and go.
I thank the hon. Member for that comment. It is about how we view community benefits and how embedded in communities they are. The hon. Member for South Cambridgeshire (Pippa Heylings) talked about things being done with communities, not to them. This is about what will best benefit a community and having that discussion at an early stage, which is what I have been advocating.
The traditional understanding of community benefit is payment for a local football team’s shirts or things like that, but that is not what I see this industry or this Bill unlocking. It needs to be about transforming local communities, which, critically, comes through skills, through the supply chain and through delivering industrial benefits that local people have access to. That is the thrust of what I am trying to say—clearly I have not been successful, if the hon. Member for Inverness, Skye and West Ross-shire (Mr MacDonald) did not see that, but I will persevere, which I am sure he will be delighted to know.
Interestingly, the Crown Estate has recently supported a community project in my constituency called Projekt Renewables—it has a “k”, giving it a slightly Nordic slant on things. It is a box park construction next to the Grimsby Fishing Heritage Centre, bringing together the old and the new, and the past, present and future. It provides community education, and it is a space to bring together schools, businesses and visitors to learn about the renewables sector in Grimsby, including its history, its importance and the possibilities for the future. The community education piece is incredibly important, and we do not talk about it enough.
The Crown Estate recognised that there is a need for wider understanding of activities, some of which are significant or significantly disruptive in local areas, so that residents can better understand what is happening in their place. I keep talking about opportunity, because some Members have not seen this Bill as an opportunity for expansion, investment, growth and long-term change. The Bill actually unlocks quite a lot of that. There is an opportunity not only for greater expansion of public information and education, but to have a single standard of available materials and off-the-shelf information to support local areas. That would help provide a general understanding that would stop individual companies producing their own bespoke education programmes. We should have something that is uniform and that provides the facts, and then companies can build on that if they want. It would be a much stronger offer, and more beneficial to collective understanding because of the uniformity.
However, there are further steps that the Crown Estate could take to provide local people with skills, to guarantee sustainable development. In my area, the freeport is already undertaking some work on skills. Under the new devolution plans, there is provision for skills to be a key strand of mayoral responsibility, but how can the Crown Estate fit into that model? I believe that it really must do so to maximise the benefit of all the organisations, and to have a common theme and common objectives. Arguably, the Crown Estate has a lot more to lose if the skills are not there for offshore deployment and long-term maintenance support.
New projects such as the Able quay, which is just outside my constituency, will make offshore wind ambitions deliverable. It will open up the supply chain investment opportunities that we have been waiting for—frankly, for far too long—and enable the Crown Estate to generate significant revenue and value for the UK. The Crown Estate could do so currently but, under the new proposals in the Bill, has an even greater opportunity to invest in infrastructure such as the Able quay. Port facilities are holding back the sector and the core skills that are currently in shortage in the industry, as well as those that we know will become a critical blockage in the future once the newly consented projects get under way.
If we really want to maximise the value of projects and see the UK get the biggest bang for its buck, it is essential to use every arm of every organisation to actively support them in overcoming the challenges. I know that the Crown Estate is willing—and I have seen it in action, so I know that it is also able—but I wonder whether this Bill needs to say explicitly that it has a duty to focus on infrastructure and skills, which are so critical. Not having those prerequisites in place could make projects undeliverable, and no developer or supply chain company can oversupply or invest ahead of decisions, because the Crown Estate makes so many of the final decisions, alongside the Government. No one can invest until those decisions are made.
Devolution and the creation of GB Energy—two great leaps in structural change in this country—give a great opportunity for new public institutions to be created in order to intervene in skills. In the Humber region, I would like to see an arrangement or organisation that brings together the Crown Estate, the new devolved authorities, the freeport and the Humber Energy Board. With support from the likes of GB Energy and central Government, it could back a coherent approach to supporting skills and avoiding their becoming a barrier to project delivery, as well as reduce costs by supplying enough talent for the whole sector, rather than each project chasing the same small pool of people.
We should use the Bill to catalyse substantial and lasting change, providing employment opportunities for generations to come. I understand that Crown Estate Scotland is already carrying out similar efforts, actively promoting skills and job opportunities through initiatives such as community capacity grants, which support social enterprise projects and training courses, and land-based skills education, so I do not think that is beyond the scope of the Bill.