I shall go on to address some of those points further in my speech.

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 4 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 £1.4 billion boost for the UK economy.

As I have said, devolution would also delay UK-wide grid connectivity reform. The Crown Estate is using its data and expertise as managers of the seabed to feed into the National Energy System Operator’s new strategic spatial energy plan. For Wales, the Crown Estate is working in partnership with the energy system operator to ensure that its current pipeline of Welsh projects, the biggest of which is the round 5 offshore wind opportunity in the Celtic Sea, can benefit from this co-ordinated approach to grid connectivity up front. Introducing a new entity, which would have control of assets only within Wales, into this complex operating environment, where partnerships have already been formed, would not make commercial sense.

Secondly, the Crown Estate’s assets and interests in Wales, as compared to its assets in England, are of a fundamentally smaller magnitude, which would very likely not be commercially viable if the costs were unsupported by the wider Crown Estate portfolio. The Crown Estate, in its present form, has the ability to take a longer-term approach to its investments and spread the costs of those investments across its entire portfolio. A self-contained, single entity in Wales would not have the same ability, nor would it benefit from the expertise that the Crown Estate has developed over decades in delivering offshore wind at scale. A devolved entity would be starting from scratch, midway through a multimillion-pound commercial tendering process, at a time when the Crown Estate is undertaking critical investment in the UK’s path towards net zero.

For instance, the commercial viability of all three 1.5 gigawatt floating offshore wind project development areas in the Celtic Sea, which straddle the English and Welsh administrative boundaries, benefited from the Crown Estate’s significant investment of time, expertise and capital to enable entry to market. UK floating offshore wind, which is an emerging offshore technology that the Crown Estate is supporting, will be particularly vulnerable to such market disruption.

Thirdly, income generated by the whole Crown Estate portfolio currently benefits the people of Wales. As I have already noted, the Crown Estate pays its entire net profits into the UK Consolidated Fund each year, which both enables those revenues to fund UK government spending in reserved areas in Wales—for example, in policing—and supports the funding provided through the block grant. In comparison, if Wales were to benefit only from the income generated in Wales, then it would likely be zero or negligible for several decades to come. Welsh assets are relatively new and will take time to mature, likely in the order of 10 to 15 years. The Crown Estate has shown itself to be a trusted and successful organisation with a proven track record in both effective management and profit generation, which are valuable outcomes that we need to be careful not to undermine.

In answer to my noble friend Lady Ritchie, the Crown Estate is working closely with the Northern Ireland Executive and agreed a statement of intent last year confirming their joint aspirations towards establishing offshore wind leasing for Northern Ireland. I will write to my noble friend Lord Berkeley about the boundaries of the Duchy of Cornwall.

In answer to the noble Baroness, Lady Kramer, on royal funding, the sovereign grant is currently set by reference to 12% of Crown Estate profits; however, the Sovereign Grant Act includes a statutory requirement to review every five years the percentage rate used in this calculation to determine whether it remains appropriate. This review is conducted by the three royal trustees. Where necessary, the Government lay a statutory instrument to amend the percentage used. For example, following the royal trustees’ review last year, the rate was cut from 25% to the current 12%, and the next review will begin in 2026.

Amendment 1, tabled by the noble Lord, Lord Wigley, would require that

“The functions of the Crown Estate in Wales may not be exercised without the consent of the Welsh Government”.

The Crown Estate operates independently from government and, as such, does not currently require the consent of any Government for the exercise of its functions. The Crown Estate does not, for example, require the consent of the Treasury or Parliament to exercise its functions in England. Such an amendment would therefore give the Welsh Government disproportionate control over part of the Crown Estate, out of step with England and Northern Ireland. Further, if the wording of the amendment were interpreted as giving the Welsh Government the ability to block the Crown Estate from, for example, exiting loss-making or lower value activities, this could conflict with the core statutory duty of the Crown Estate commissioners to enhance the long-term value of the estate as well as hinder their ability to move into other activities in Wales.

Amendment 23, also tabled by the noble Lord, Lord Wigley, would require the Crown Estate commissioners to

“transfer all net profit generated from the Crown Estate’s activities in Wales to the Welsh Government on an annual basis”.

As the Crown Estate’s operations are not divided into business units for each nation, agreeing the exact net profit figure attributable to Wales is not straightforward, because most of the associated costs cannot easily be disentangled from the Crown Estate’s overall costs and would, in places, require subjective judgment. Further, as I have already set out, given that the Crown Estate takes a long-term approach to investments, it is anticipated that its investments in Wales could take up to 10 to 15 years to see an appropriate return. Therefore, if net profits were transferred to the Welsh Government now, they are likely to be zero or negligible.

I hope that these explanations have been helpful and that I have provided some clarity on these points. I hope that the noble Lords, Lord Wigley and Lord Hain, and the noble Baronesses, Lady Smith and Lady Humphreys, will not press their amendments as a result.