Lord Harlech
Member’s explanatory statement
This amendment would ensure that any revenues from the Welsh Crown Estate would still be paid into the Exchequer.
Lord Harlech (Con)
My Lords, in opening this group of amendments in my name, I declare my farming and land management interests in Wales.
I pay tribute to the noble Lord, Lord Wigley, for his long-standing service to Wales and his clear and consistent advocacy for greater Welsh autonomy. There is much that we agree on, and I like to think we work together in raising Welsh interests in your Lordships’ House, not least in hoping to see the Welsh rugby team resurgent in the not too distant future. The noble Lord’s passion is beyond question and his commitment to Welsh interests is evident in this Bill. However, while I respect its intent, I regret to say that it is the wrong Bill introduced at the wrong time with the wrong outcomes for the people of Wales.
Amendments 1 and 6 stand in my name and seek a straightforward but essential safeguard: that revenues from the Welsh Crown Estate should continue to be paid to the Exchequer. At a time when public finances are under enormous strain, diverting these vital funds away from the UK Exchequer is neither prudent nor responsible. These revenues are used not just in Wales but across the United Kingdom, for the benefit of all our citizens.
Let us ask plainly: will these funds be better managed by the Labour-run Welsh Government, whose track record is one of failure and misplaced priorities? Just look at the 20 mile per hour speed limit debacle, a policy that has stifled economic activity, hit small businesses and left the public exasperated—as I can see the noble Baroness, Lady Bennett of Manor Castle, is at the moment. What confidence can we possibly have that the same Ministers will not use Crown Estate revenues to fund yet more policies that the Welsh people do not support?
Without stealing his sandwiches, I note that Amendments 2 and 8, proposed by my noble friend Lord Moynihan, seek to retain the Crown Estate’s borrowing cap at 25% of its net asset value. This is not ideology but basic financial stewardship. The Crown Estate is not a plaything; it manages critical assets such as our seabeds and land. A financially secure estate is vital to its long-term success, and excessive borrowing puts that future at risk. Whether devolved or not, that principle must hold.
Amendment 3 introduces a necessary backstop: the power for HM Treasury to impose conditions if the devolved Crown Estate in Wales fails in its functions. Again, this is an act not of hostility but of responsibility. Sadly, we have seen time and again that, when left unchecked, the current Welsh Government do not always act in the public interest. This safeguard would ensure that the Crown Estate’s essential duties—environmental, economic and fiduciary—were upheld to the standards the public expect.
The Clause 1 stand part notice exists because the Bill, at its core, is premature. We have only just passed the new Crown Estate Act, and it is simply not wise to begin carving out individual devolved frameworks before we have seen how the new national reforms bed in. This is a constitutional experiment based more on politics than on policy.
Although I defer to my noble friend Lord Moynihan on the reporting amendment, I will say this: any serious consideration of devolving the Crown Estate must be preceded by rigorous evidence and not ideological aspiration. A report on the impact on finances, land management and environmental standards should be the starting point, not an afterthought.
To conclude, although I respect the ambition of the noble Lord, Lord Wigley, I must urge caution. The people of Wales deserve better than what the Bill contains. They deserve good governance, sound management and real accountability. Sadly, the Bill does not offer that. I beg to move.
The Deputy Chairman of Committees (Baroness Garden of Frognal) (LD)
My Lords, the noble Baroness, Lady Harris of Richmond, is taking part remotely, and I invite her to speak.
Baroness Harris of Richmond (LD) [V]
My Lords, I am speaking to the amendments in this group on behalf of these Benches and, in doing so, I confirm the strong support we expressed at Second Reading for the Bill. There was a sense of outrage when President Trump attempted to squeeze an agreement for the extraction of rare minerals out of Ukraine without payment. His argument was that capital and equipment sent to Ukraine by Congress under the leadership of President Biden was not a grant, as had previously been thought, but a loan. That is the outrage felt in Wales when its natural assets are exploited without any benefit to the people of Wales.
At Second Reading, the noble Lord, Lord Wigley, referred to the flooding of Tryweryn and the political consequences that followed, including, very probably, his presence in this House. The purpose of the Conservative amendments is to ensure that none of the assets or income of the Crown Estate in Wales, whether property rights in land or the highly valuable rights in relation to the Welsh zone, should fall under the control of the Senedd or its Ministers. Rents and profits should whizz up the motorway to lodge in the Treasury as they always have, even when it was called Watling Street. Perish the thought that some Welshman, in the tradition of Owain Glyndŵr, would get his hands on the loot. You might call that the Conservative principle.
Baroness Bennett of Manor Castle (GP)
My Lords, I rise briefly to speak on behalf of the Wales Green Party against all the amendments in this group. The noble Lord, Lord Harlech, perhaps misinterpreted my reaction: I was astonished that he is not taking seriously the statistics showing that 20 mile per hour speed limits stopped about 100 deaths and serious injuries on Welsh roads when they were in force. Those saved lives and people’s lives being transformed for the worse by serious injury should not be taken in any way lightly, and it is a great pity it is not continuing. Similar figures from TfL show a 34% decrease in serious deaths and injuries in London. A range of measures affect that —around 15% perhaps from other measures—but 20 miles per hour is a significant factor in reducing deaths and injuries on roads. Surely everyone wants that to happen.
It is a great pleasure to follow the noble Baroness, Lady Harris of Richmond. She has far more personal connection with this than me, and the passion in her speech leaves me with little to add, except to say that the Crown Estate in Wales is drawing on Welsh resources. The resources surely should stay in Wales. This is a basic democratic principle. The concentration of power and resources here in Westminster is a problem all around the country, but particularly for the nation of Wales. There is a fast-growing interest in independence for Wales. Those who wish to maintain the union might like to think about what position they are taking on this Bill, because not being able to have the returns from their own resources is something about which there is increasing anger in Wales.
I spoke at Second Reading in favour of—
Lord Harlech (Con)
My Lords, what guarantee can the noble Baroness give that, were this Bill to pass, the revenue from it would be distributed equally throughout Wales and not just be concentrated in Cardiff and the surrounding area, as revenues currently are?
Baroness Bennett of Manor Castle (GP)
In response to the noble Lord, Lord Harlech, I note that Wales has a democratic electoral and political system, unlike Westminster, where we have a Government who won the support of 34% of voters and are now in control. If he is looking for a democratic distribution of resources, he is a lot better off in the Senedd than in Westminster.
I was about to finish, so I repeat that the Wales Green Party strongly backs this Bill and opposes the amendments. More power to Lord Wigley’s elbow.
Lord Moynihan (Con)
My Lords, I will speak to Amendments 2, 3, 8 and 9, which are in my name, and explain why I oppose Clause 1 standing part of the Bill. I declare my interests as set out in the register, particularly my chairmanship of Amey and Acteon; although they are not contracted in offshore wind projects in Wales, they work in this space worldwide.
Before I concentrate on my amendments, I place on record the considerable sadness I have in finding myself in opposition to the noble Lord, Lord Wigley, who saw me through my Back-Bench and ministerial career in another place. I have always viewed him as a trusted friend and outstanding politician, and he is recognised as such across both sides of both Houses. I put that down to the English influence on him, which, if I am not mistaken, came from his birth in Derby and education in Manchester.
Amendments 2 and 8 seek to ensure that the Bill is in line with the same borrowing limits as the Crown Estate. Ostensibly, it is reasonable to ask why such borrowing limits are prudent. The answer is that there is considerable political, strategic and commercial risk associated with devolving and transferring the functions of the Crown Estate in Wales to Welsh Ministers.
The most recent publicly available figures for asset values in Wales are from the August 2023 freedom of information request, which stated—in property values in sterling—that offshore wind and marine accounted for some £793 million out of a total of £853 million of assets. Our focus is therefore on those offshore opportunities—particularly but not exclusively wind—with marine energy being some 93% of those assets. That is what we need to focus on when considering this Bill. Taking a 25% debt-to-asset value would mean borrowing up to £213 million, which would need to be against Welsh assets to that value. Currently, as I understand it, Crown Estate Scotland does not have access to borrowing powers, so even if my amendment were accepted, this would create further asymmetry of opportunity.
The difficulty of making sense of these figures, and therefore the security required for borrowing, is further compounded by a number of economic factors. The first is the creation of global instability in the sector. The international renewable energy market is experiencing that instability, no small part due to the changes of US tariff and green subsidy policies. In challenging global conditions, it is crucial that the UK market can present a united and stable environment to give confidence to investors in the sector and developers to commit their capital and their projects in the UK.
However, there is already difficulty in doing so. For noble Lords following this area of net zero, the Ørsted cancellation of Hornsea 4 only last month because of the economics of the project proves just how volatile and uncertain the sector is at present. The benefit of the current structure of the Crown Estate is an ability to balance investments and reduce risk exposure across England and Wales, ensuring more robust and sustainable growth in a way that a devolved Welsh entity would struggle to replicate at the pace necessary to capitalise on the immediate opportunity that exists. Neither balance sheet strength nor economics of scale would exist if this Bill went through. Any further fragmentation could signal political and regulatory uncertainty, reducing the UK’s attractiveness as a destination for clean energy investment and harming both the Welsh and the broader UK economies.
My second point, and the second reason behind the amendments, is that the UK systems-wide approach to tackling energy security and the net-zero ambition of the Government gives a basis to the fact that the Crown Estate is, first and foremost, involved with the energy transition across the UK and in Wales, and with the development of offshore wind in particular and ground-breaking new technologies, which are even more risky, particularly the ones that are considered for floating offshore wind generation in the Celtic Sea. In this context, the UK’s transition to renewable energy, particularly offshore wind, requires a highly co-ordinated approach. Fragmenting seabed management through devolution would disrupt the collaboration currently in place between the Crown Estate, the National Energy System Operator and the UK Government. This could delay grid connection decisions and undermine the strategic coherence of the contracts for difference auctions. My genuine belief is that a transfer to Welsh Ministers would be counterproductive to the Welsh economy—which is what we should be thinking about in the context of this Bill—Welsh jobs and growth in the sector.
I would like briefly to address the comments of the noble Baroness, Lady Bennett. The Celtic Sea—what we are talking about at the present time—and the role that the Crown Estate can play in de-risking and stimulating the supply chain in those projects is critical. I am afraid that those who believe in transferring the Crown Estate assets from the UK back to Wales may find themselves misguided if they feel that the Welsh acreage of the Celtic Sea represents some sort of 530 carat Cullinan diamond—the great star of Wales.
The reality, as I found to the cost of many months, if not years, of negotiation as Minister for Energy in another place on the Frigg treaty—which went across the median line of Norway and the UK—is that the proposed Celtic Sea developments create a similar issue, with a pretty even split between English and Welsh waters. The delineation is highly complex; it is not a straightforward North Sea divide. If you look at a map, you see that there is a kaleidoscope of different ownership interests, and fragmentation of the control of the project would be counterproductive, in my view. It would take more time, it would be economically inefficient, and it would be politically sensitive if two different organisations were trying to make sure that that economic opportunity—which would benefit the people of Wales, as well as the people of the United Kingdom—was curtailed or sent into a political quagmire of negotiations and differences.
The round 5 project development areas in the Celtic Sea are equally important to both the south-west of England and to Wales. That is a critical factor when you consider the scale of this project in the totality of the Crown Estate assets. With this scale in mind, it is important to reflect on the integrated and complex nature of the supply chain which would back up that project. It is unrealistic to expect that every component of the supply chain would be available in Wales.
That is the reason I tabled these amendments. It is not just the major port of Port Talbot which is critical to the Celtic Sea leasing round; Bristol is equally important. Transfer operations in Wales could create jurisdictional and logistical bottlenecks, impeding the rollout of offshore wind infrastructure. My concern, and my reason for tabling these amendments, is not principally political; it is to make sure that there is no inhibition to the development of these interesting opportunities, particularly the offshore opportunities that exist, which will benefit the people of Wales and the people of the south-west.
The evidence presented in the Future of Offshore Wind illustrates that the majority of future opportunity in the Celtic Sea is further away from the Welsh coast and not in Welsh water. I add that an aspect of this is covered by Northern Ireland as well, so there is a triple lock on this project which would need to be looked at. That is the reason I tabled my amendments. The Welsh coastline presents a significant opportunity, regardless of the position of projects in the seabed. It is in the best interests of both Wales and the Crown Estate to ensure this potential is fully realised, so that coastal communities can benefit from the offshore resources. It is important to contrast this, for example, with the Scottish seabed and Scottish waters, which are materially distinct, creating no operational overlaps nor conflicting regulation and contrasting financial systems.
Finally, I emphasise my beliefs not only that this is important, as was heard during the passage of the then Crown Estate Bill, but that the operational independence of the Crown Estate is critical in enabling it both to maximise the economic opportunities and to take an apolitical, long-term decision in line with its statutory purpose. Imposing oversight from Wales through either Welsh Ministers or the Treasury would have a significant impact on the abilities of the commissioners to carry out their functions and to create both lasting, shared prosperity for the nation and jobs in Wales. Although this Bill is ostensibly attractive, without any amendments it would be economically disadvantageous to Wales; that is my main driver.
For those reasons, I speak to the amendments in my name. I do not have time to cover the last one; suffice it to say that I think that, if we pass this Bill, there would be real benefit in having after one year a review not just of what has happened in Wales but, potentially, of what has happened in Scotland as well.
Lord Harper (Con)
My Lords, I will speak briefly. I strongly support what my noble friend Lord Moynihan said about the complexity of the economic opportunities here. I was involved in some of those negotiations when I was the Secretary of State for Transport. They are complex and overlap on both English and Welsh interests. If you were to split them, that would make it harder to land those economic opportunities.
I want to touch briefly on what the noble Baroness, Lady Bennett of Manor Castle, said about the 20 mph speed limits in Wales, in order to present a balanced picture. I will not dwell on them, because they are not the subject of this Bill, but I think that she should also have mentioned that the original proposals by the Welsh Government carried a cost to the Welsh economy of £4.5 billion; that is in the Welsh Government’s own impact assessment. You have to balance that against the lives saved and decide whether that balance is correct and whether that cost of £4.5 billion, if used in a different way, would achieve a better outcome. I just want to put that on the record to balance out the argument. The noble Baroness is pulling a face at me, but the impact assessment of the Welsh Government costed that policy at £4.5 billion; that is their figure, if she wants to take it up with them.
The final point I want to make picks up the point made by the noble Baroness, Lady Harris of Richmond, about where the revenues go. It is worth pointing out, I think, that, through the Barnett formula, the Welsh people are net beneficiaries of the UK Exchequer. It is not clear from the Bill, as proposed by the noble Lord, Lord Wigley, what impact transferring revenues of the Crown Estate has on the Barnett formula—that is, whether it will be netted off and leave the same amount of money going to the Welsh Government, or whether it will be an increase—but the point is that more than all of the revenue that flows from the Welsh public into the Exchequer goes back because they are net beneficiaries. So there is no unfairness here to the people of Wales. I think that taxpayers in the rest of the United Kingdom would look unfavourably on more revenues being transferred to the Welsh Government and increasing that net benefit at a time when the public finances are, as my noble friend Lord Harlech said, so stretched. The picture is a little more complex than some noble Lords have said. For those reasons, I strongly support—
Baroness Bennett of Manor Castle (GP)
For clarification, would the noble Lord like to make it clear that the figure of £4 billion he gave was over three decades?
Lord Harper (Con)
Yes, I am very happy to make that point, but it is still a significant sum of money. If you do what is normally done in these circumstances, which is to look at the cost versus the benefit, I would argue that that is not a good return. Of course, that is one reason—alongside the enormous unpopularity of that policy—why the Welsh Government responded to the political pressure from both my party and the public by changing the policy significantly. They themselves are not, I think, persuaded by those arguments.
I was going to finish by saying that, for the reasons I set out, I strongly support the amendments tabled by my noble friends Lord Harlech and Lord Moynihan. I very much hope that, in due course, the House will get a chance to support them.
Lord Thomas of Cwmgiedd (CB)
I shall speak to the amendments in my name. By way of background, we have had the benefit of the noble Baroness, Lady Harris of Richmond, speaking about what makes this issue what I would describe ultimately as a hearts-and-minds issue. The acquisition of the Crown Estate in Wales by conquest and inheritance, the imposition of English laws, the exploitation, as it is perceived in Wales, of Wales’s resources of coal and water and the fact that Scotland has been allowed to control its own estate turn this into an important political and hearts-and-minds issue. I have tried, through the amendments I have put forward, to recognise that. In saying that it is an important hearts-and-minds issue, we must bear in mind the view of the Welsh Government, of the same complexion as the Government here in London, that they want devolution. The overwhelming majority of Welsh authorities want devolution. The very strong feeling is, for the reasons that I have tried briefly to summarise, that there ought to be devolution of the Crown Estate to Wales.
What has bedevilled this problem is a failure to understand and give effect to the difference between ownership and benefit from an asset and management of an asset. Those of us who may be fortunate to have the odd spare penny or two know the difference. Allowing someone else who is better qualified to manage assets while ensuring that the policy towards those assets and the ultimate benefit appertain to the owner is an important distinction that I have sought to make.
The first step is to try to identify what is the Crown Estate in Wales. Is it valuable? Does it have any assets? Does it have any revenue? Noble Lords may recall that in the Second Reading debate I spent a little time—I am not going to do that today because it is unnecessary—going through the accounts of the Crown Estate Commissioners in respect of Wales. The revenue and asset values for the year ending March 2021 were clear, but there was nothing in the accounts thereafter.
I challenged the Minister, the noble Lord, Lord Livermore, the Financial Secretary to the Treasury, about how an accountant could possibly not be able to identify the assets and income. I am immensely grateful to him and the chief executive of the Crown Estate Commissioners and to one of the commissioners for a meeting I had with him. Having checked with him, and I am happy to say he agrees that I can say this, I was told by him that in the financial statements for next year—that is, for the year ending March 2026—it is the commissioners’ intention to provide a separate breakdown for Wales of the assets and revenue. That shows that you can identify what is Welsh and what is English, and you can show the resultant revenue streams and capital expenditure, so an awful lot of the obfuscation that has occurred can be got rid of. I do not want to comment any further. Let us wait for those accounts to be produced. It brings to an end the argument that you cannot really say what is Welsh and what is English and what is the benefit from it. We will know. It is a great pity that this was not done before.
Therefore, I think that what is before us now is, if this hearts-and-minds issue is to be addressed and dealt with, how do we take this forward? It would be very helpful for us to hear from the Minister about the discussions that have been taking place between his colleagues—I assume that they are his colleagues—in Cardiff and his colleagues here in London about dealing with this hearts-and-minds issue and, as the noble Lord, Lord Moynihan, has been very careful to stress, obtaining economic benefits for Wales. The distinction that I try to draw is between ownership of and benefit from the assets and the management of the assets, and that is why I put forward Amendments 4 and 7.
First, Amendment 4 is primarily to set a timetable. It is no use having a Bill, it seems to me, that transfers the assets on its passing without some clear preparatory work and a timetable to reassure investors and others that the transfer is orderly. Therefore, Amendments 4 and 7 put forward a timetable. I have put dates forward as indicative only: obviously, the timetable is a matter for detailed discussion between the Governments in London and Cardiff, providing that, during that period, the Crown Estate commissioners remain completely in control—they ought to take account of the views of Welsh Ministers but not be bound by them—and that the income thereof in the meantime is properly identified. This really provides a bridging period, dealing with the issue of the transfer of the assets but allowing their management to continue, and therefore really tries to address the problem that, as I understand it, some Government Ministers have put forward, that all this would wreak havoc with investment and jobs in Wales. I regard that as a fallacy. When one really looks at what we are talking about, it is accepting that the Crown Estate in Wales is a national asset of the Welsh people, but accepting that there needs to be an orderly transfer.
As to the future, I have put down a separate amendment, Amendment 5, which I will address in due course, in the second group of amendments, because it addresses this fundamental misunderstanding that is used to try to justify the preparation of an injustice which does such damage to the union.
Lord Sandhurst (Con)
My Lords, the amendments in this group relate to the operation of the Crown Estate in Wales under the newly devolved approach. I should say at the outset that on this side of the House, we are opposed to the Bill in principle. I know that the noble Lord, Lord Wigley, tabled amendments to the Crown Estate Act during its passage through your Lordships’ House. The Official Opposition were clear at that point that the Government should resist those amendments. As my noble friend Lady Vere of Norbiton said then, we have set the Crown Estate on a very different path as a result of that legislation, and now is not the time to frustrate that process with a very different proposal on the direction of the Welsh part of the Crown Estate. That argument was right then; it is right now.
Amendments 1 and 6 in the name of my noble friend Lord Harlech would require the revenues of the Welsh part of the Crown Estate to be paid to the Exchequer after the devolution and transfer of functions to a new body. This would ensure that the existing revenues go to the Exchequer, which, as we all know from the rumours about the spending review next week, is already in great need of income. If control of the functions of the Welsh Crown Estate were to be devolved but the revenues continued to be paid to the Exchequer, that would at least achieve part of the aim of the noble Lord, Lord Wigley, without depriving the Exchequer of much-needed revenue. Perhaps the noble Lord is open to that.
My noble friend Lord Harper raised interesting and cautionary points about the Barnett formula more generally. Amendments 2 and 8 in the name of my noble friend Lord Moynihan seek to ensure that the Welsh Crown Estate is bound by the same borrowing limits as the Crown Estate itself. As noble Lords will recall from the passage of the previous Bill, my noble friends Lady Vere of Norbiton and Lord Howard of Rising spoke at length and pressed Ministers to secure that borrowing limit. We were pleased that Ministers accepted those calls and implemented a borrowing limit, even though this was placed on a statutory footing. The amendment which my noble friend Lord Moynihan has sensibly tabled seeks to ensure that the Welsh Crown Estate is similarly bound by an appropriate limit on its borrowing. Here I should mention, of course, the important points that he made about the impact that this transfer would have on the future of energy, in this country as a whole and in Wales in particular, and the difficulties in apportioning that.
Amendment 3, in the name of my noble friend Lord Moynihan, seeks to establish a backstop to prevent mismanagement of the Welsh Crown Estate. We know how poorly Wales is served by her current devolved Government. Whether it is education, healthcare or economic outcomes, Wales consistently underperforms, so much of this is the responsibility of the Welsh Government. Given that backdrop, it is understandable that noble Lords are a little more than reticent about proposals to take another step down that road, with a body as important as the Crown Estate and with such big assets. We on these Benches share the concern that motivates my noble friend in his amendment, and we would be interested to hear from the Minister whether the Government might consider some form of backstop such as that proposed by this amendment.
Amendments 4 and 7, in the name of the noble and learned Lord, Lord Thomas of Cwmgiedd, reflect legitimate concerns about the untimely transfer of these powers in the event that the Bill is passed. Clearly, a sudden change so soon after we passed the Crown Estate Act, which sets a very different direction of travel for the Crown Estate, would be very disruptive to that new direction. Perhaps the noble Lord, Lord Wigley, would respond to that point in his remarks at the conclusion of this group.
In summary, we have serious concerns about the transfer of the Welsh parts of the Crown Estate to a devolved framework. There are many important issues that must be addressed before this proposal could go forward. We look forward to hearing from the noble Lord, Lord Wigley.
Lord in Waiting/Government Whip (Lord Wilson of Sedgefield) (Lab)
My Lords, before I start my speech, I pay tribute to our Armed Forces who participated in D-Day 81 years ago today. I will mention the 2nd Battalion of the South Wales Borderers and the Durham Light Infantry, who fought side by side on the beaches that day. We will never forget their sacrifices.
While the Government’s position was made clear on debates on this topic during the passage of the recent Crown Estate Bill, it continues to be a pleasure to speak in Committee on this Bill. We should all recognise the passion that the noble Lord, Lord Wigley, has shown on this issue. I prewarn noble Lords that there will be a time during my speech when the Durham accent comes into contact with the Welsh language—so just beware of that.
I thank the noble and learned Lord, Lord Thomas, and the noble Lords, Lord Harlech and Lord Moynihan, for their thoughtful contributions and accompanying amendments relating to the operational framework of any devolved Welsh Crown Estate entity. I also welcome the contributions from the noble Baronesses, Lady Harris and Lady Bennett, and the noble Lord, Lord Harper.
Amendments 1 and 6 would ensure that the revenues from the Welsh Crown Estate would still be paid into the Exchequer. Amendments 2 and 8 would place parameters on borrowing. Amendment 3 would allow the Treasury to impose whatever conditions it sees fit under the scheme for ensuring the expeditious exercise of the functions of the Crown Estate in Wales. Amendment 9 would require the Secretary of State to produce a report on the effectiveness of devolving the management of the Crown Estate.
Amendments 4 and 7 would delay the transfer of the functions in respect of the Crown Estate in Wales for a period of three to seven years after the passing of this Bill, while establishing interim arrangements including requiring the Crown Estate commissioners to engage with Welsh Ministers when exercising their powers in relation to property, rights or interests in land in Wales, and rights in relation to the Welsh zone, in order to enable an orderly and planned transfer, to publish financial information about the Crown Estate in Wales and to pay the proportion of the consolidated revenue account distributable to the Consolidated Fund, which is attributable to the Welsh Crown Estate and to the Welsh Consolidated Fund.
As the House has heard previously, the Government believe that the Crown Estate as it currently operates across England, Wales and Northern Ireland provides the best outcome for Wales and the wider United Kingdom. Devolution of the Crown Estate would risk fragmenting the energy market and delay our progress towards net zero. The Crown Estate has played a critical role in positioning the United Kingdom as one of the most significant global markets for offshore wind over the past 20 years. It has also helped to position Wales at the forefront of clean energy technology and growth, with North Hoyle offshore wind farm becoming Wales’s and the United Kingdom’s first major offshore renewable energy project in 2003 during leasing round 1. Subsequent leasing rounds, including round 4, are delivering offshore wind benefits to Wales.
More recently—in fact, last month—in a boost to the United Kingdom’s clean energy transition, the Crown Estate announced that through its capacity increase programme, seven fixed-bottom offshore wind farms will increase the amount of power produced by offshore wind by adding turbines to projects already at sea. This includes Awel y Mor in north Wales. In addition, the ongoing offshore wind leasing round 5 for floating offshore wind in the Celtic Sea is expected to deliver significant jobs and supply chain benefits to local communities in Wales and the south-west.
The benefits of these projects are felt in the local communities and supply chains across Wales. For instance, the Crown Estate recently invested £1.2 million in Welsh tidal stream energy through the Morlais demonstration zone. Owned and managed by Ynys Môn social enterprise Menter Môn, the Morlais tidal scheme is set to become the largest consented tidal energy project in Europe.
The recently passed Crown Estate Act, which has broadened the scope of the Crown Estate’s investment and borrowing powers, means that it is uniquely placed to drive forward growth-generating projects in Wales. But this is not all that the new Act achieves. As noble Lords will remember, the Government were pleased to support the amendment of the noble Lord, Lord Hain. This was a thoughtful and positive step that will see the appointment of two additional Crown Estate commissioners, each with an additional responsibility to advise on conditions in Wales and Northern Ireland respectively. This will ensure that the board continues to work in the best interests of Wales while delivering its statutory duties as set out in legislation.
It takes time to set up new processes for such appointments. However, I would like to reassure noble Lords that the Treasury is working on plans for these appointments to ensure that they fit the public appointments recruitment process and comply with the governance code. An important feature of those appointments is that the devolved Governments reserve the right to be consulted on them.
Some noble Lords have argued that Wales would benefit financially from devolution of the Crown Estate. Let me set out why the Government do not believe this to be the case. The funds generated by the Crown Estate’s activities across the UK—more than £4 billion over the last decade—already benefit Wales in two ways. First, those Crown Estate revenues support UK Government spending on vital public services in Wales in reserved areas. Secondly, in areas which are devolved to Wales, when the UK Government fund spending in England, the Welsh Government receive funding through the Barnett formula.
Even if devolution could be achieved without risking the revenues generated in Wales, this would not automatically lead to an increase in available funding to the Wales Government. For example, in the case of Scotland, where the Crown Estate is devolved, the Scottish Government receive a block grant reduction to reflect the profits they retain from Crown Estate Scotland following its devolution.
To answer the point made by the noble Baroness, Lady Harris, in previous debates noble Lords questioned why the Crown Estate does not report on income generated in Wales. The noble and learned Lord, Lord Thomas, spoke particularly passionately—I thank him for his contributions—including today on the third amendment. Following the case put forward at Second Reading, the Crown Estate met with the noble and learned Lord to explain in more detail the challenges involved in reporting separate capital and revenue accounts according to administrative and geographical boundaries. However, the Crown Estate recognises the desire for greater understanding through a Wales lens and has committed to review reporting for Wales in its 2025-26 annual report and accounts. I thank the noble Lords from across the House for their engagement on this matter.
Finally, in response to the noble and learned Lord, Lord Thomas, and just to make the position clear, the Government will continue to discuss these issues with the First Minister and the Welsh Government to ensure that Wales sees the full benefits of the Crown Estate.
Lord Wigley (PC)
My Lords, I am very grateful to all colleagues who have participated in this debate. We are in Committee and therefore I am not going to be tempted towards the general arguments that have arisen from several directions over the past hour or so. I thank the noble Baroness, Lady Harris, for coming in from a distance, the noble Baroness, Lady Bennett, for her contribution, the noble Lord, Lord Harlech, for moving the amendment, and the noble Lords, Lord Moynihan, Lord Harper, Lord Sandhurst and Lord Wilson. and the noble and learned Lord, Lord Thomas, for speaking to his amendment, and from whom we may hear more in a moment. Have I covered everybody? I hope so. I am very grateful to everyone who has participated.
It might assist colleagues, particularly those who do not live in Wales and may not keep up with every twist and turn in Welsh politics, to know that, by now, of the 22 Welsh local authorities, of a whole range of political allegiance—and some have no overall political control—21, all but one, have passed resolutions calling for the devolution of the Crown Estate to Wales. This has been supported by Plaid Cymru, Labour and the Liberal Democrats, and I believe even accepted by some Conservative members and Reform UK councillors, who are only too aware of the current feeling of injustice in Wales in this regard.
Mention has been made of the windmills in the sea to the north of north Wales. Noble Lords who watched “Question Time” last night will have noted that the largest round of applause in the programme came when the suggestion was made that Wales should benefit from all those windmills that take up the horizon to the north of Llandudno, along the coast by Colwyn Bay, Prestatyn and Rhyl. There is very strong feeling about them, and that is why 21 out of 22 councils have passed resolutions in support—and I have little doubt that there is sympathy also in the 22nd, which has not.
In considering the amendments before us today, I hope we will bear these background points in mind. By all means, let us improve the Bill by debating amendments and, if appropriate, passing them on Report. But I urge that the Bill be approved by this Chamber and it would then be a matter for those in the other place to come to a resolution on it in due course, if they are prepared to make the time available, so that they can at least address the strong feelings of an overwhelming majority of Welsh councils.
I have noted the comments made by the Delegated Powers and Regulatory Reform Committee in its report last January, that the powers conferred by new Section 52A of the Wales Act 2017 should be subject to scrutiny solely by both Houses of Parliament. While I understand the logic of that viewpoint, I personally would have preferred to have an even-handed approach that enabled the Senedd to voice an opinion. However, I note that the Scottish Parliament were not afforded such an opportunity, and if that were the only issue at stake, I would of course accept an amendment to that end, to facilitate the progress of the Bill.
I will now address the first group of amendments, starting with Amendment 1, which was moved by the noble Lord, Lord Harlech. Amendment 1 seeks, in the words of the presenters of this amendment, to direct the moneys raised by the Crown Estate in Wales to the coffers of the Treasury, and not to the Government of Wales. This is nothing less than undermining the fundamental objective of the Bill, of course, and as such does not improve the Bill, but in effect works out as if the Bill had been refused a Second Reading.
This seems to me to be a back-door way of blocking the Bill and I would be grateful to know whether those who tabled this amendment have secured the agreement of the leader of the Welsh Conservative Party on this matter. If indeed Darren Millar MS has agreed to such a ploy, it is an issue about which the voters in Wales in various Senedd elections will certainly be aware. Let every voter be aware that the Tory party wants the resources of Wales to be put into the control of faceless Treasury mandarins rather than the elected representatives of Wales. My political friends in Wales have experienced this in both the Senedd and the National Assembly, to the dismay of elected Members of all parties.
I will give a specific example of that experience, which Wales suffered at the sticky hands of the Treasury in Whitehall. Between 2007 and 2011, the Labour-led Welsh Government, to their huge credit, attempted to avoid the fiasco of a year-end stampede to spend revenue moneys before the end of the financial year on any scheme that may be at hand, irrespective of whether such expenditure represented the best value for money. Everyone knows that this still happens the length and breadth of these islands. Despite a tightening of the rules, the Treasury has not sorted that out. So, 20 years ago, the Welsh Government devised a scheme whereby they accumulated all the year-end revenue underspends into a capital fund, which was allocated to worthwhile projects such as building schools and hospitals. Between 2007 and 2011, they accumulated some £400 million—a process that the then Labour Government at Westminster accepted.
Lord Thomas of Cwmgiedd
“(c) confer on the Welsh Ministers or the body that may be nominated as the transferee power to enter into an agreement with the Crown Estate Commissioners for the performance of specified matters in relation to management or investments of the Welsh Crown Estate on behalf of Welsh Ministers or the body nominated as the transferee.”Member’s explanatory statement
This amendment permits agreements to be entered into for the Crown Estates Commissioners to exercise specified management and investment functions on behalf of Welsh Ministers.
Lord Thomas of Cwmgiedd (CB)
My Lords, I will be brief. I separated out this amendment because it deals with an issue we too often neglect when we speak about devolution: the working of the union. It seems to me that the debate on the previous amendments brought into clear focus a failure to distinguish the positives of devolution—that is, giving to nations what they aspire to and what they feel they ought to have, as a matter of hearts and minds. As the noble Lord, Lord Wigley, has said, there is enormous support for the devolution of these powers. But it is also important to remember that we are part of a union, and the Crown Estate shows and exemplifies that you can give powers to be devolved in certain areas, but then you should work together.
I suggested in the amendment that the Crown Estate commissioners should have this power to take the management of the Crown Estate in Wales from the Welsh Government—in accordance with the investment policy of the Welsh Government, and being consulted about it—so that it could be a model of the way in which the union operates to benefit economically.
Spending a great deal of my time in Wales, I hope that the Government understand that there is an enormous feeling of hostility to the way in which the Government have run the Welsh economy—a feeling that they have not sufficiently acceded to what happens in Wales. I have no views on whether that is right or wrong—I express none—but it seems to me important that we do two things: that we recognise national aspirations and accept, as the noble Lord, Lord Wigley, said, that what you give to Scotland you ought to give to Wales, because you recognise it as having the same national aspirations. However, we also need openly and transparently to work together where it is in the common interest. As the remarks of the noble Lord, Lord Moynihan, showed, working together in the energy sector is essential.
I therefore wished this particular point to be debated separately to bring home, I hope, to His Majesty’s loyal Opposition—who were not very good at this when they were in government—and to this Government, before it is too late, the absolute essentials of making it clear that you respect nationhood and what has been done by way of devolution but also that you will work together to benefit each of the nations, by co-operation and joint policies, where it is in the overwhelming national interest.
The Crown Estate epitomises the recognition of national aspirations—but where it compels working together. That is a lesson much broader than this particular Bill, but, as a strong believer in the union, I think we in London too often forget it. We do not recognise the pluses that devolution has brought, the fact that we cannot row back on it and how much more effort needs to be put into working together. This provides the perfect model. I beg to move.
Lord Sandhurst (Con)
My Lords, I will speak briefly to Amendment 5 in the name of the noble and learned Lord, Lord Thomas of Cwmgiedd. He has made thoughtful and powerful contributions to our debate today, not least—as he has said—as a strong supporter of the union.
Amendment 5 would create a framework for powers to be granted to enter into agreement with the Crown Estate commissioners for the performance of specified matters in relation to the management or investments of the Welsh Crown Estate by Order in Council. I have listened carefully to the noble Lord’s arguments, and he has made a powerful case for his amendment. However, as I said in my more general remarks to the previous group, we have serious concerns about the direction set by this Bill. Now is not the time to take forward proposals for devolution of the Welsh Crown Estate.
That said, if this Bill is to go forward, we hope the noble Lord, Lord Wigley, will listen carefully to constructive remarks made by the noble and learned Lord, Lord Thomas of Cwmgiedd, and my noble friends Lord Harlech, Lord Moynihan and Lord Harper.
Lord Wigley (PC)
My Lords, as I indicated when I spoke previously, I would be minded to accept this amendment if it was moved on Report.
Lord Wilson of Sedgefield (Lab)
My Lords, as I have already set out, the Government believe that the Crown Estate, as it currently operates across England, Wales and Northern Ireland, provides the best outcomes for Wales and the wider United Kingdom. I will not repeat the arguments I set out earlier in this debate.
I thank the noble and learned Lord, Lord Thomas, again for his considered contributions to this debate. The amendment we are debating now—Amendment 5 —would permit the Crown Estate commissioners to exercise specified management and investment functions on behalf of Welsh Ministers.
I remind the House that existing statute provides the Crown Estate with independence and autonomy to set and achieve its goals. The Government believe that the Crown Estate should continue to operate in this way—as a commercial business independent from government—because it has shown itself to be a trusted and successful organisation with a proven track record in effective management. Even if the proposal in this amendment was being suggested for the Crown Estate in its current form, it would be important to ensure that independence was preserved in respect of any functions it took on behalf of Ministers.
More broadly, as I previously set out, the Government will continue to discuss these issues with the First Minister and the Welsh Government to ensure that Wales sees the full benefits of the Crown Estate.
Lord Moynihan (Con)
Before the noble and learned Lord, Lord Thomas, winds up, I completely endorse and agree with his views about co-operation. There is no doubt whatever that it is vital in the relationship between Wales and the United Kingdom in this context.
My arguments have not been principally political at any stage during Committee. My argument is that the lion’s share of the Crown Estate’s assets in Wales requires to be maximised in terms of economic value to Wales, and that there should be the overarching control and involvement of the Crown Estate as is currently set up. I believe that would be the most efficient and efficacious way of maximising the value of those assets in the Celtic Sea, and that was the reason that I pushed this argument so strongly, and not because of future political arrangements. After that project comes to fruition and benefits all concerned, there may well be an opportunity to look at the political realities that have been put forward by the noble Lord, Lord Wigley, and the noble and learned Lord, Lord Thomas.
I think that is the reason that the Government have taken the position they have, and I endorse it strongly: it is a cross-party view, but it is one that is driven—from my perspective—on the economic realities of those assets in Wales at this time. We should still make sure there is maximum co-operation between all interested parties, the Crown Estate and the locally interested parties in Wales, so that the projects we have been discussing in the context of this Bill are brought to fruition to the maximum economic benefit of both the United Kingdom as a whole and indeed Wales.
Lord Thomas of Cwmgiedd (CB)
I will briefly reply. There is a difference between what I have put forward and what the noble Lord, Lord Moynihan, suggests.
I thank everyone for listening patiently to what I had to say. I believe that, at the end of the day, as one sees across the world, we must recognise the importance of what is stirred up by nationhood. It is important to try to analyse the way in which economic benefits can be conferred. I have listened to all the arguments, and it still seems to me that the compromise which I put forward—namely, to recognise nationhood and national aspiration but to co-operate to provide economic benefit—is something for now and not for some distant time in the future. Having listened to all the arguments and hearing the views of the Committee, I beg leave to withdraw my amendment.