First concession to Wales by UK Government over running of Crown Estate

Martin Shipton

The UK Government has made its first ever concession to the idea that Wales should have a say in the running of the Crown Estate, we can reveal.

It has decided to back a House of Lords legislative amendment from former Labour Welsh Secretary Lord Peter Hain that will see the appointment of a new Crown Estate Commissioner to represent the interests of Wales.

The question of who should receive Crown Estate revenues has become an increasingly potent political issue in Wales. Such revenues are devolved to the Scottish Government, but not to Wales.

In October Lord Hain was one of a number of cross-party peers who backed moves to amend the Crown Estate Bill, intended to reform the legal framework under which the estate operates, so that revenues would come to Wales.

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Energy projects

The former Neath MP told the Lords: “Welsh Labour’s case is that devolving the Crown Estate is vital so that profits from leasing land for energy projects can be retained in Wales as they are in Scotland.

“I understand that it has been argued in the past, on behalf of the previous Conservative Government, that introducing a ‘new entity’ - as they described it - to manage the Crown Estate in Wales would ‘fragment the market, complicate existing processes, and likely delay further development offshore, undermining investment in Welsh waters’.

“Frankly, that reflects old, centralised, conservative, anti-devolution Whitehall thinking. I hope that there will be fresh thinking from this new Labour Government, although I fully recognise that the impossible financial predicament inherited from the bankrupt Tory Government means that finding the money to devolve management of the Crown Estate to Wales at this time would be very difficult.

“I also understand that this matter is not currently a priority, given all the other matters on health, education and local government that certainly are. I hope, therefore, that my noble friend the Minister, when he replies, will give me some encouragement that discussions will now take place with Welsh Labour First Minister Eluned Morgan and her colleagues on their firm desire to see powers over the Crown Estate devolved to Wales in the future, as they have long been in Scotland.”

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Counter-productive

However, Treasury Minister Lord Livermore made it clear in his response that the UK Government was determined to keep the revenues. He also set out reasons why, in the government’s view, devolving responsibility for the Crown Estate to Wales would be counter-productive, stating: “Devolving the Crown Estate to Wales would most likely require the creation of a new entity to take on the role of the Crown Estate in Wales.

"This by definition would not benefit from the Crown Estate’s current substantial capability, capital and systems abilities … This would indeed further fragment the UK energy market by adding an additional entity and, as a consequence, it would risk damaging international investor confidence in UK renewables and disrupting the National Energy System Operator’s grid connectivity reform, which is taking a whole-systems approach to the planning of generation and network infrastructure.

“ … Furthermore, the Crown Estate’s marine investments are currently made on a portfolio-wide basis across England and Wales. To devolve to Wales would disrupt these existing investments, since they would need to be restructured to accommodate a Welsh-specific entity. Let me give two examples. The first is the Crown Estate’s £50m supply chain accelerator, which will match-fund early stage projects related to offshore wind leasing round 5, and the £50m investment in the offshore wind evidence and change programme, which brings together government bodies, the industry and key stakeholders from across the UK to better understand environmental impacts of offshore wind.

“To devolve the Crown Estate at this time would also risk jeopardising the existing pipeline of offshore wind development in the Celtic Sea planned into the 2030s. The Crown Estate’s offshore wind leasing round 5 is spread across the English and Welsh administrative boundaries in the Celtic Sea. It was launched in February this year and is expected to contribute 4.5 gigawatts of total energy capacity, or enough to power four million homes. In addition to energy, the extensive jobs and supply-chain requirements of round 5 will also likely deliver significant benefits for Wales and the wider UK.

“Lumen, an advisory firm to the Crown Estate, has estimated that manufacturing, transporting and assembling the wind farms could potentially create around 5,300 jobs and create a £1.4bn boost for the UK economy. As I have said, devolution would also delay UK-wide grid connectivity reform.”

Discussions

Since the October debate, though, we understand that intense discussions have taken place behind the scenes and that Treasury Ministers have been persuaded to make a concession to Wales. In doing it is hoped that potential friction over the issue between the UK and Welsh governments will be headed off.

On the afternoon of November 5 Lord Hain will propose a new amendment to the Crown Estate Bill that will see the appointment of three new Crown Estate Commissioners to give advice respectively about relevant matters concerning the estate in Wales, England and Northern Ireland.

The amendment will be backed by Plaid Cymru peer Baroness Carmen Smith, the Welsh Liberal Democrats’ Baroness Humphreys and crossbench peer Lord Thomas of Cwmgiedd, the former Lord Chief Justice of England and Wales.

Lord Livermore will accept the amendment on behalf of the UK Government.

Lord Hain said: ”I’m really pleased that we secured with cross party and Secretary of State for Wales support the first breakthrough Wales has achieved on having an input into Crown Estate policy. The initial response from the Treasury reflected old Whitehall thinking under the Tories. This new stance shows that the fresh Eluned Morgan Keir Starmer relationship is breaking new ground for further progress on devolution under Labour.”