To ask His Majesty’s Government what assessment they have made of the impact of the activities of the Crown Estate on (1) the Welsh economy, and (2) household budgets in Wales.
The recently passed Crown Estate Act ensured that the Crown Estate can continue working in the best interests of Wales and the wider United Kingdom. The Crown Estate is key to the £1.4 billion of economic growth and more than 5,000 jobs that the Government want to secure from floating offshore wind in the Celtic Sea. It works closely with the Welsh Government to ensure that the offshore potential of this emerging sector benefits Welsh communities onshore.
I thank the Minister for that reply. However, the Crown Estate has removed the cap for offshore wind leases and is running uncapped auctions that force wind farm developers to pay extremely high fees simply to access the seabed. Can the Minister confirm that the fourth offshore wind leasing round generated more profit for the Crown Estate than all the previous rounds combined and that this system has inflated the cost of building offshore wind farms, with a consequent increase in electricity prices for household budgets in Wales? Is it not time for political oversight of the activities of the Crown Estate in Wales?
I thank the noble Baroness for that question, but on the point about oversight, a Crown Estate commissioner with special responsibility for Wales will be appointed in due course. As far as offshore wind is concerned, for Wales a priority is to deliver certainty. Retaining the current model avoids fragmenting a cross-border Celtic Sea market and preserves investor confidence at a sensitive point for floating offshore wind. Further devolution would risk fragmenting the energy market, undermining international investor confidence and disrupting activity elsewhere in the Crown Estate.
Is the Minister not aware of the reply given by a Minister in the other place to the MP for Anglesey, Llinos Medi, when the Government confirmed that they had no assessment of how many jobs would come to Wales from the new offshore wind projects in the Celtic Sea and the Irish Sea? Is the Minister aware of the very real concern in Wales that these projects will be bypassing Wales’s supply chains, losing economic potential? Is it not necessary for power and authority over the Crown Estate to be transferred to the Welsh Government so that they get the priority that they deserve?
Offshore will create up to 5,000 jobs—on top of the 3,000 jobs that will be created by the building of small modular reactors on Anglesey. It will provide energy for 1.5 million households. We are aiming in the right direction. As far as the supply chain is concerned, we will be investing £50 million for a supply chain accelerator and up to £350 million for enabling port and supply chain infrastructure to come forward.
Have His Majesty’s Government asked the Crown Estate exactly how it helps to deliver their promise for a more environmentally conscious and greener Wales when it carries on handing out licences to marine aggregate dredgers to dredge in marine protected areas off Wales? Dirty seas deter tourists.
We have a very good relationship with the Crown Estate and work very closely with the Welsh Government. We will be appointing a commissioner to the Crown Estate to ensure that we have someone there who is prepared to look consciously at all the issues that affect Wales. We want to see a Welsh economy that is growing. One way of doing that is through investing in green industries, which I would have thought the noble Baroness would welcome.
My Lords, to pick up the point made by the noble Lord, Lord Wigley, is the Minister aware that people in Wales are convinced, following conversations with the Crown Estate, that the overwhelming majority of new skilled jobs created by offshore in the Celtic Sea will go to outsiders, not to people in Wales, and that the supply chain will use a few Welsh companies but primarily suppliers from outside Wales? Therefore, can he talk to us about what the Government are doing to build the supply chain and the skills in Wales and to make sure that Welsh companies have a definite percentage of the new business and opportunities that are on offer?
The Crown Estate and the Government are particularly concerned about ensuring that we have investment in local supply chains, and we are going along with that in whatever we are doing. For example, as I have said, this £50 million is going to be invested in the supply chain accelerator. We are going to ensure that some of the money that will be generated from offshore wind goes into local communities. We are well aware of the issues, but we need to focus on the fact that we are heading in the right direction as far as green energy development is concerned.
My Lords, when the Crown Estate had this windfall from its offshore wind bonanza, it was reputed to have said that it wanted a lot of the money to go towards good causes. Given that this will mean an explosion of overhead power lines in Wales and elsewhere in the United Kingdom, what discussions have the Government had with the Crown Estate about spending some of that bonanza on, where possible, burying these power lines?
The Government’s approach to burying these cables underground is well known, really, because, essentially, where we can do it, we will, in order to protect the local area. It is cheaper to put them overhead, but even if you bury them, there is still a lot of disruption to the local area with the kind of access you need to the cables themselves. It is not actually the answer to all our concerns. We know that we need to think about how we develop these pylons and whether we should lay the cables under the ground, but to do that is not the answer in all cases.
My Lords, does my noble friend agree that the events in the Middle East and the renewed shock to oil and gas prices show why we should be self-sufficient, which is why we should enormously welcome the development of offshore wind off the coast of Wales?
My noble friend is absolutely right that we need to think about energy security. One thing that is coming out of what is happening, tragically, in the Middle East at the moment is that, because oil and gas prices are set internationally, this impacts on every country’s economy. That is why we need to invest in the green economy, in nuclear, in wind turbines and in solar—so that we become independent. When issues such as this happen and when there are shocks to the international energy markets, we do our best to ensure that we are insulated from them.
My Lords, in my ministerial experience, the Crown Estate arrangements, in fact, worked pretty well. The Minister will be glad to hear that. But the more important question for the Minister today is: would Welsh households not have been helped by lower bills if Labour had not gone down the dangerous road of banning North Sea oil and gas? That looks even more irresponsible, with oil prices spiking because of the war in the Middle East.
Just to repeat my response to the previous question, we have to make sure that we are independent of these problems that we are facing. Rather than relying on fossil fuel, the prices of which are set internationally, we need to have home-grown green energy to ensure that we can resist these problems. I just want to point out one or two things about how we are helping people in Wales. We are cutting household energy bills, saving the average household £150. We have helped over 160,000 people with the minimum wage. We have increased pensions by 4.8%, and we have increased benefits for people out of work by 3.8%. The 700,000 pensioners in Wales are going to be better off because of this Government.
My Lords, when we had the misfortune of leaving the European Union, Wales lost a significant amount of money from its structural programmes. The then Government promised that that shortfall would be more than made up for; indeed, the phrase was “not a penny less”. We have been promised that that gap will be bridged from the prosperity fund, but the Welsh Government remain rather sceptical about that. Does the Minister recognise that there is a shortfall and are the Government prepared to do anything about it?