Wales’ finance secretary Mark Drakeford has called for the creation of a sovereign wealth fund out of profits from the Crown Estate as pressure grows for the collection of assets to be devolved. Mr Drakeford said the creation of the fund would ensure Welsh people profit from offshore wind projects in the Celtic sea.
The Crown Estate is a collection of marine and land assets and holdings that belong to the monarch. It includes the seabed out to 12 nautical miles, which is around 65% of the Welsh foreshore and riverbed, and a number of ports and marinas. On land the Crown Estates owns 50,000 acres of common land in Wales. The value of the estate in Wales is more than £603m of land.
The Welsh Government and all 22 councils want the Crown Estate to be devolved to Wales but the UK Government has said no on numerous occasions. For our free daily briefing on the biggest issues facing the nation, sign up to the Wales Matters newsletter here
The former First Minister Mr Drakeford admitted the creation of a sovereign wealth fund was not official Labour policy and called for the UK Government to “come to the table”, according to BBC Wales.
A sovereign wealth fund is a state-owned pot used by governments to manage money often generated though state-owned natural resources or financial projects.
Mr Drakeford said, historically, Wales’ natural assets had been exploited, including through the coal industry. Wales continues to deal with that legacy, he said, “the profits have all been siphoned off elsewhere”.
Mr Drakeford made the comments at the the Labour Party conference, during a fringe event discussing how taking assets into public ownership could win back votes from Reform UK.
He said while the renewable energy industry was key to the future, measures should be taken to ensure Welsh people see the advantages. “These things belong to us and this time, unlike the coal industry of the past, we must make sure that it is Welsh people who see the benefit,” he said.
Referencing wind projects currently being developed, including in the Celtic sea, he said a fund should be created by taking a small amount of money from each unit of energy generated by Crown Estate projects. These would then be reinvested into Wales.
Countries across the world operate sovereign wealth funds, including China, Saudi Arabia and Norway which operate some of the largest. Norway’s managed funds act as a financial reserve for the country, while Saudi Arabia’s sovereign wealth fund purchased Newcastle United FC in 2021.
First Minister Eluned Morgan also renewed calls for the Crown Estate to be devolved in her speech at the conference, a policy UK Labour does not currently support.
Drakeford said while he also supports devolution, it would not necessarily need to happen to create a sovereign wealth fund. “There is some middle ground here, what we need is for the UK government to come to the table to have those conversations,” he said.
Plaid Cymru announced similar plans last year to create a sovereign wealth fund from Crown Estate profits, but Mr Drakeford denied he was taking their idea.
“Ideas don’t belong to any particular party, do they? If this is a good idea and if this is the right idea for Wales, I’m very keen to have that debate and then to see the right way to make it happen,” he said.
The Crown Estate is hot political topic, because since 2019 responsibility for management of the Crown Estate’s assets in Scotland has been devolved but that is not the case in Wales.
