Devolution argument raises its head again over earnings

By Andrew Coffman-Smith

According to a crown estate report there are plans to build 11,000 offshore wind turbines

According to a crown estate report there are plans to build 11,000 offshore wind turbines

East Antrim MLA Oliver McMullan (Sinn Féin) has renewed called for the Crown Estate’s surplus of £1.2 million to be “returned to Assembly control” after its yearly earnings were released last month.

“It should be coming back into the coffers of the devolved areas such as our own place here in Northern Ireland,” the nationalist MLA said.

The Crown Estate is a centuries-old property portfolio of real estate, coastlines and bodies of water that are held by the public, in the monarchy’s name, in order to be protected, maintained and/or rented out for development.

In Northern Ireland, coastal councils and various industries pay rent, leases and licenses to the Crown Estate as it owns 55 per cent of the UK’s foreshore, many of its rivers and lakes; and the vast majority of the seabed – up to 12 nautical miles from shore. The Crown Estate also leases out the sole gold mine in Northern Ireland and promotes and protects wildlife conservation.

Headed by an unelected, independent commissioners’ board, the Estate’s profits go directly to Parliament and are, in turn, redistributed UK-wide back to the public after Her Majesty receives a share of 15% to cover her duties.

Mr McMullan’s criticisms are largely directed at why only 50 per cent of the money raised in marine revenue taken by the Crown Estate is directly given back to coastal communities through grants to two projects each year under the Coastal Communities Fund.

Mr McMullan said: “I don’t believe that it should be allowed back to England because all that we are getting here is £500,000 per year through the Coastal Communities Fund and that has only started this year.”

Northern Ireland Crown Estate:

Across the UK for the financial year of 2012-2013, the Crown Estate’s £8.1b portfolio returned record high profits of £253m – a 5.2 per cent increase from 2011-12. For the full report on the Crown Estate in Northern Ireland, click here:

The Estate’s Northern Irish assets saw its gross surplus decrease by 7.7 per cent from £1.3m to £1.2m but revenue increased by 7.7 per cent from £1.3m to £1.4m as did its property value from £13.4m to £14.8m and capital investment from £0.1m to £0.7m.

Most noticeably, Northern Ireland Crown Estate’s coastal revenue rose by £200,000 to £1.3 million last year and is expected to continue to rake in money from leasing development rights of offshore sites to renewable energy companies after the first leases were announced in October.

The Crown Estate’s own report sets out that the first three of these offshore energy projects, a wind farm off of south-east County Down and two tidal stream projects off of County Antrim, are expected to generate up to 800 MW of electricity. According to the Crown Estate in its Northern Ireland earnings report, there are plans to build 11,000 offshore wind turbines within 150 nautical miles of Belfast. The report also said 300 jobs will be created alone by thenew £50m offshore wind terminalbuilt in Belfast Harbour to “help establish a hub capable of servicing a market valued in excess of £100 billion.”

In addition to communication and gas lines that lay across the seabed, the Crown Estate also owns the rights to 92 fishing sites operated by 83 license-paying fish farms in Northern Ireland. According to the Department of Agriculture and Rural Development, the local aquaculture industry in 2011 netted £10.21mof fish and directly employed 90 fulltime and 30 part-time workers.

Council rent and community grants:

With an eye on the future, it appears that “wind farms have the potential to be the most lucrative” of the Crown Estate’s Northern Ireland assets, Mr McMullan says, an argument he also put forward during an October 2011 Assembly debate over his motion calling for the devolution of its coastline revenues.

Twelve of Northern Ireland’s district and borough councils already pay rent over use of ports and marinas; ranging from Lisburn’s “peppercorn contract” of just 5p to North Down’s £133,590.66. In total, last year they paid £248,361.55 – up £25,652.55 or 10.33 percent from 2011-2012.

Leaving aside the two extremes, the other ten councils pay on average £11,477.08 in rent and leases for use of Crown Estate-owned seabed and land. Derry City, for instance, paid £12,250 to the Crown Estate who owns all of Lough Foyle. The UK’s claim of ownership over Lough Foyle has caused a rift with the Republic in recent years that has led to a cable and sewage disposal project being blocked.

DOE for F.Y. 2011-2012 and individual councils for F.Y. 2012-2013. *Figure for this year not yet confirmed.

DOE for F.Y. 2011-2012 and individual councils for F.Y. 2012-2013. *Figure for this year not yet confirmed.

“They are paying maybe £50,000 to £100,000 to the Crown Estate and when you consider the money, we are only getting £500,000 a year to the Coastal Communities Fund,” said McMullan.“It really is a pittance and it’s actually an insult to our intelligence. That is all that they are going to give us from the amount of money that they’re earning for the seabed.”

2012-2013 was the first financial year of the Coastal Communities Fund. In return for £248,361.55 rent paid by coastal councils, a total of £425,000 of grants was given to the first two projects: construction of a carbon neutral, water-bottling facility in Larne Lough that is ran by a social enterprise and the regeneration of a 124 year old derelict school in Glenarm into a craft, community and tourism centre.

This coming year, the Coastal Communities Fund will disperse a total of £500,000 in grants.

Deeper currents of devolution and nationalism:

Despite being backed by the UUP and the SDLP, Mr McMullan’s 2011 motion was defeated 51 to 32. UUP finance spokesman Leslie Cree, whose North Down constituency pays the most in rent and leases to the Crown Estate, announced Ulster Unionists’ surprising support of the motion.

The DUP, which strongly opposed the motion,was adamant it was not a financial issue but a nationalist attempt to remove the Crown from Ireland’s shores especially as it coincided with the Sovereign Grant reforms to the monarchy’s funding which has cemented its government finances to the Crown Estate. Alliance also opposed McMullan’s motion because any revenue lost by the UK Treasury in the devolving of Northern Ireland Crown Estate would be cut from Westminster’s block grant to Stormont.

“They turned it around that the [bill to devolve revenue from the] Crown Estate was an attack on the Crown, as per se, but it was nothing to do with the Crown,” said Mr McMullan.

But he maintains: “It was [instead] to do with the Estate and the money that they are earning.”

There are demands elsewhere in the UK to devolve the Estate – in particular from the Scottish National Party.

Last year, Westminster’s Scottish Affairs Committee criticized the Crown Estate Commission overseeing the Crown Estate as an unjust “absentee landlord” and “tax collector”. The parliamentary committee said its management of the marine environment also lacked transparency and needed public consultation. It recommended devolving the oversight of the Crown Estate in Scotland to the Scottish Government and then further to local levels.

London responded by rejecting full devolution of the Crown Estate but gave concessions of devolving land at West Prince’s Street Gardens in Edinburgh and rights to fish wild oysters and mussels to Scottish organisations; formalising the role of the Scottish commissioner and transferring greater oversight of its Scottish property management to its Edinburgh headquarters.

Downing Street, under the current Tory-LibDem Coalition, is adamant not to devolve the revenue to Stormont either.

“Property belonging to the Crown Estate is a reserved matter under the Northern Ireland Act 1998,” a Northern Ireland Office spokesperson told The Detail. “Revenue from the Estate is paid each year to the Treasury, and then distributed across the UK as part of public spending. Northern Ireland therefore benefits from Crown Estate revenue in the same way as any other part of the UK. The Government has no plans to devolve powers relating to this revenue.”

Against the backdrop of possible further devolution of the British state and even Scottish independence, the issue over the administration of the Crown Estate’s revenue will likely to continue to be raised in Holyrood and Stormont – especially if offshore renewable energy proves to be a green industry after all.

© The Detail 2013