Proposed Law Aims to Stop Wealth Extraction in Wales
A proposed law is on the table aiming to put an end to what is referred to as “wealth extraction” from Wales. The law’s objective is to transfer responsibility for the Crown Estate within Welsh borders to the Welsh Government. The Crown Estate, an extensive collection of assets owned by the British monarchy, encompasses a significant amount of urban, coastal, and maritime land throughout the UK. Although the estate operates as a separate business, its profits are sent to the Treasury annually, with 12% of the total amount designated for the Sovereign Grant. Plaid Cymru peer Lord Wigley introduced a private member’s bill with the goal of enhancing Wales’ democratic control over its natural resources and ensuring that the profits from these assets benefit Welsh communities.
Lord Wigley highlighted how Wales has historically faced exploitation of its natural resources, whether it be coal, minerals, water, or energy sources like waves, sea currents, and wind. The proposed law seeks to ensure that Wales maximises the benefits from projects involving these resources, which are becoming increasingly valuable due to investments in renewable energy initiatives such as offshore wind farms. Lord Wigley pointed out that Scotland has already devolved control over the Crown Estate since 2016, and Wales should have a similar opportunity to control and benefit from its own assets.
Baroness Smith of Llanfaes, another Plaid Cymru peer, emphasised the importance of fairness and ending the ongoing wealth extraction from Wales. Presently, revenue from the Crown Estate’s activities in Wales goes directly to the UK Government, without a guarantee of equivalent returns to Wales. The National Infrastructure Commission for Wales has noted that the current setup results in a transfer of wealth from Wales to England, which is deemed illogical and unfair. The fundamental principle underlying the proposed law is that every nation should have the right to derive benefits from its natural resources.
Labour peer Lord Murphy of Torfaen and independent crossbench peer Lord Thomas of Cwmgiedd also lent their support to the Crown Estate (Wales) Bill. However, the Government and the Opposition oppose the bill at this time, citing concerns that devolution could disrupt crucial projects related to renewable energy infrastructure and grid connectivity. Treasury minister Lord Livermore cautioned that devolving the Crown Estate to Wales might lead to fragmentation in the energy market, potentially hindering offshore wind development in the Celtic Sea and undermining progress towards achieving net-zero emissions targets for the entire UK.
Lord Livermore argued that creating a new entity to manage the Crown Estate in Wales, as would be required under devolution, may not have access to the same scale, capital, and expertise enjoyed by the current Crown Estate setup. He also highlighted potential delays in UK-wide grid connectivity reforms, which are necessary for meeting growth targets, as cooperation on energy generation and infrastructure between England and Wales could become more challenging post-devolution. The Government’s stance is that devolving the Crown Estate may not necessarily result in financial benefits for Wales in the near term, as Welsh assets may take many years to generate significant returns.
The Scottish Government currently receives a reduction in its block grant to reflect the profits it retains from the Crown Estate Scotland post-devolution. However, the UK Government does not view devolution of the Crown Estate as being in the best interests of Wales or the wider UK. Despite some opposition, the Crown Estate (Wales) Bill proceeded to its second reading in the House of Lords on a quest for further deliberations.
The proposed legislation offers a glimpse into the complex interplay between natural resource management, economic benefits, and regional autonomy. As Wales seeks to assert greater control over its assets and channel the resulting wealth towards local communities, debates around devolution and resource governance are likely to continue shaping the political landscape in the region.