Crown Estate (Wales) Bill [HL]

Baroness Bennett of Manor Castle Excerpts

Friday 6th June 2025 Lords Chamber

We call for these Conservative amendments to be rejected out of hand. The noble and learned Lord, Lord Thomas of Cwmgiedd, is more constructive, as we can see from his later amendments. He accepts the argument—as expressed by the noble Lord, Lord Moynihan—that the Government are in the process of delicate negotiations which the transfer of management to the Welsh Government immediately might interrupt. He is proposing a transitional period during which the existing commissioners must consult and take into account the views of Welsh Ministers and provide them—with a view to transparency—with all the information they require concerning capital and income, direct expenses and costs. He rightly wishes to challenge the suggestion that it is all too difficult to sort out, and we support him entirely. However, we would like clarity from the Minister as to what precise negotiations would currently be affected if the Bill as drafted came into force.

[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.