Crown Estate (Wales) Bill [HL]

Lord Thomas of Cwmgiedd Excerpts

Friday 6th June 2025 Lords Chamber

[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.

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Moved by

[Lord Thomas of Cwmgiedd]

5: Clause 1, page 4, line 20, at end insert—
“(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.

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[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.

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[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.

Amendment 5 withdrawn.