Earthlinggb's Blog

The Crown v Crown Estate

Posted in Uncategorized by earthlinggb on May 14, 2014

Myth busting

We are a unique organisation with a long and complex history, and sometimes our business is not always clearly understood. For information on some common misconceptions about The Crown Estate, please read on.

The Crown Estate makes profits from shale gas fracking in the UKshow/hide
On a number of occasions, and by way of example the edition of Countryfile broadcast on 4 August 2013, The Crown Estate has been cited as a ‘land owner’ in articles concerning ‘fracking’ or that it will benefit financially from fracking that takes place on peoples’ land.In the particular instance of Countryfile the presenter says: “Unlike their counterparts in the United States it (fracking) won’t make them (farmers) a fortune. There are different laws in Britain and America, over there the gas is owned by the landowner whereas here it belongs to The Crown Estate and the farmer just gets paid for leasing the land that the well-head sits on.”

This is incorrect, please find our official statement on the facts as they are below:

Recent policy changes regarding the method of shale gas extraction known as ‘fracking’ has led to widespread public interest in the matter. In particular, driven by stories from the United States of the income that land owners have received from permitting fracking on their land, land owners and media outlets have examined the nature of UK land rights and the potential allocation of profits from the process in this country.

There is a distinct contrast between land rights in the UK and the US in that an American citizen has full rights to all the minerals beneath the surface of their land. In the UK, under the Petroleum Act 1998, ‘The Crown’ retains all sub-surface rights to hydrocarbons, such as shale gas; so landowners will not benefit directly from the oil or gas found underneath their property.

In the context of shale gas and as with North Sea oil and gas, the rights of ‘The Crown’ are managed by the Secretary of State for the Department of Energy and Climate Change who, on behalf of Her Majesty, grants licences for hydrocarbon extraction. The Crown Estate does not have a role in shale gas extraction and is no different from any other landowner in the UK in this respect.

It is important to recognise the difference between the ‘The Crown’ as a concept, and ‘The Crown Estate’ as an organisation. The Crown Estate is an £8 billion asset management business tasked by Parliament with managing a diverse portfolio of assets commercially and paying all profits to the Treasury. This portfolio includes the UK seabed, London’s Regent Street and much of St James’s, together with one of the nation’s largest rural estates. It does not include any hydrocarbon rights.

The Crown Estate created or funds the coastal community fund.show/hide
The fund is a government mechanism for determining and providing support to coastal communities administered by the Big Lottery’s Big Fund. The value of the fund, administered annually, is linked to The Crown Estate’s annual income from our Energy and infrastructure and Coastal portfolios. We have no involvement otherwise and continue to pay all of our profits to the Treasury for the benefit of the nation.The coastal community fund should not be confused with our own marine stewardship fund. Part of the marine stewardship programme, the fund supports coastal and marine community initiatives that further good management of the coastal portfolio.

Further information

Big Lottery Fund – coastal communities fund

Marine stewardship fund

Under the Sovereign Grant, the Queen receives 15 per cent of the profits from The Crown Estate.show/hide
This isn’t correct. The Crown Estate continues to pay its entire revenue surplus (or profit) to the Treasury. The Sovereign Grant simply sets the level of funding the Queen receives from the Treasury by reference to 15 per cent of The Crown Estate’s profits.As quoted in…

The Guardian

“Under the new grant the Queen receives 15 per cent of the profits from The Crown Estate, but from funds two years in arrears.”

The Crown Estate is the Queen’s property company.show/hide
No, this is misleading. Whilst The Crown Estate belongs to the reigning monarch ‘in right of The Crown’ and the monarch remains the legal owner, it is The Crown Estate which has the powers of management and control – i.e all the powers of an outright owner. This contrasts with the Queen’s private estate, which includes Balmoral and Sandringham.The Government also does not own The Crown Estate. It is managed by an independent organisation headed by a Board (also known as The Crown Estate Commissioners).

As quoted in…

The Guardian

“The Queen’s property company is putting the finishing touches to a £300m project to restore one of the most historic buildings in central London”.

The Crown Estate is a quango.show/hide
This is misleading.  Quango is the acronym for ‘quasi-autonomous non-governmental organisation’.The Crown Estate is a public body, but we are different from most other public bodies in a number of important and practical ways.

Firstly, we are a net contributor to the nation’s finances, each year sending our profit to the Treasury for the benefit of the nation.  Last year this was £252.6 million.

Secondly, whilst we work with the grain of government policy, we are not a delivery vehicle for government policy. So we are not a quango in this sense.

Thirdly, we are a fully independent organisation with a separate legal identity and accounts. The Treasury is our sponsor department, but we are separate from them. Our role is set out in the Crown Estate Act 1961 and not by the government of the day.

As quoted in…

The Press and Journal: “Community representatives in the far north are continuing to press the Crown Estate to reinstate its staffed presence in the area. The quango’s defence of its decision to axe its former office in Thurso has failed to silence critics.”

 

HC Deb 16 July 1992 vol 211 cc867-8W867W

§Mr. Mackinlay

To ask the Prime Minister if he will introduce legislation to bring the administration of the Crown estate within a Government Department and subject to Ministerial responsibility.

§The Prime Minister

No. The Crown estate is administered by the Crown Estate Commissioners under the terms of the Crown Estate Act 1961.

HC Deb 21 June 1922 vol 155 cc1301-21301

§61. Mr. RAFFANasked the Secretary of State for the Colonies whether the League of Nations has made any inquiry of His Majesty’s Government as to the traffic in opium conducted by the British North Borneo Company for consumption by the labourers on the plantations; and whether His Majesty’s Government proposes drawing the 1302attention of the company to the undesirability of any administration under the British Crown profiting by this traffic?

Mr. WOODNo, Sir, no inquiries have been received from the League of Nations relating specifically to North Borneo; but at my request the British North Borneo Company has from time to time furnished for the League of Nations information relating to that territory similar to that supplied regarding the Colonies generally. With regard to the second part of the question, I would remind the hon. Member that apart from the limitations imposed by the Charter, the administration of North Borneo is a matter for the company, and I would add that so long as the complete suppression of opium smoking in the Far East cannot be attained, it is, in ray opinion, essential that the traffic should be under strict Government control and that any profits should accrue to the administration rather than to private persons.

§Mr. RAFFANIs it not extremely undesirable that this company should engage in this traffic?

Mr. WOODHowever undesirable that may be, it must be regarded as less undesirable than that this traffic should pass into private hands.

HC Deb 01 March 1973 vol 851 cc414-5W415W

§Mr. Skeet

asked the Secretary of State for Foreign and Commonwealth Affairs, in view of the fact that rights to explore for and exploit minerals on the Continental Shelf vest in the Crown by virtue of Section 1 of the Continental Shelf Act 1964, what is the position and ownership of oil and natural gas in place on the shelf.

§Mr. Tom Boardman

I have been asked to reply.

Ownership of oil and natural gas existing in the United Kingdom Continental Shelf is vested in the Crown.

 

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