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.