A not so brief explanation
The Crown Estate is a collection of marine and land assets across the UK that belong to the Crown. The Crown Estate also refers to an independent body which manages these holdings. It is essentially a commercial property business, sitting between the public and private sectors. It’s task is to invest in and manage these land and marine assets, and then pass surplus revenue back to the UK treasury. This is done on behalf of Welsh people, the Government or the Monarch – you can decide who by continuing to read below.
The Crown Estate holdings include the Welsh seabed out to 12 nautical miles, around 65% of the Welsh foreshore and riverbed, and a large number of marinas and ports. Also included are 50,000 acres of Welsh common land ‚as well as various historic buildings castles, farms and shopping centres across the UK. [Click to read more about the land and buildings the Crown Estate manages].
The total value of the Welsh Crown Estates is more than £853 million. Its important to know though that although the land is legally ‘owned’ by the reining monarch, it is not their private property. It cannot just be sold off in exchange for this large sum. Nor is it within the remit of the Crown Estate body to sell it off- this state of affairs is confusing and is best explained through [history]. A large part of what the Crown Estate business does is to rent out its land and seabed. This generates pots of money, which is then passed to the UK treasury. In the year 2021 for example, £313m of revenue profit was transferred. A portion of this will be bypassed to the Monarchy itself. This portion is quite arbitrary and varies year on year, ranging from 12% in 2023/24 (£86m UK wide) to 25% in 2022.
The Crown Estate’s (CE) operations are first and foremost financial management. It is governed by a board of directors (called commissioners) with a CEO. Secondly, the CE’s physical operations largely involve environmental projects. The CE will employ people ranging from financial portfolio managers and market analysts to horticulturalist and river ecologists. The CE is also the body which licenses any individual’s or organisation’s activity on the seabed. This includes authorising fish farming, marine aggregate extraction and laying telecommunications and power cables. Fossil fuel extraction is excluded, which is the territory of the UK government.
Over the last decade, most of what the CE has come to do is license the development of offshore wind farms. Even though the CE only manages the first 12 nautical miles of the seabed ‘in right of the Crown’, it has been given responsibility for all marine energy assets in UK waters (except those of Scotland). After authorising their development, the CE then extracts an agreed rent from the developer over the course of the asset’s lifetime. You can read more about how this is done [here].
It is to some unsurprising that most of the CE’s resources are channelled into this area. Offshore wind turbine technologies developed rapidly in the 2010’s. Turbines became much more efficient as a result of the greater turbine heights, larger blade diameters and the use of direct-drive generators. In response to this, governments and large corporations could barely catch their breath in making pledges to build wind farms. Any of these developments have to go through the CE first. The valuation of the CE’s marine portfolio in Wales shot from £49.2 million in 2020 to £549.1 million in 2021. In 2022 it was £603 million, before reaching the £853 figure in 2023. Commensurately, the CE began to redirect its resources to accelerate the construction process of wind farms.
Before the value of the seabed rocketed during the late 2010s, the [Scots managed to get their Crown Estates devolved], so they could manage their development themselves. This is something we want for ourselves, but we realise the UK government will want to hold onto the seabed tightly, so that they can stay in control of both its management but above all the collosal rents that will be extracted in the decades to come. So why exactly do we think we should bring the Crown Estates under Welsh management?