Duncan Simpson, research director
Popular Netflix series The Crown has gripped viewers around the world. It is a homage to the life of Queen Elizabeth II, detailing the history of 20th century Britain and cementing the relevance of the monarchy as a cultural and political asset of the nation. As many look forward to the release of season four, it's worth discussing how we fund the monarchy and whether it's time for a new approach to the Sovereign Grant.
The Sovereign Grant replaced the Civil List as the funding mechanism for the royal family in 2012. The Grant funds the family’s royal duties, including travel, operating costs of the Queen's household and the up-keep of palaces in one single annual grant. It’s worth 15 per cent of the profits made by the Crown Estate, but due to refurbishment requirements at Buckingham Palace, the Grant is temporarily worth 25 per cent of the Estate's profit.
The Crown Estate is not the private property of the Queen, instead it belongs to the Crown - a legal embodiment of the state and therefore entrusted and governed by Parliament. At first glance, the Sovereign Grant seems a fair way to fund the monarch's royal duties. The Crown Estate generates receipts for the nation which is spent on public services and the royals are granted a portion of the profit. The grant cost the UK equivalent to £1.23 per person in 2019-20, including the amount reserved for refurbishing Buckingham Palace. Many taxpayers will feel this is extremely good value.
However, there are also clauses in the Sovereign Grant Act 2011 which are completely unfair on British taxpayers.
The Act includes a provision that prevents a fall in the value of the Sovereign Grant. It was put into force this year when the Crown Estate portfolio fell by more than £500 million in value, after land and property investments went sour during the pandemic. Instead of taking it on the chin like every other business owner who has seen their assets hit due to covid-19, the taxpayer has bailed the royals out - ensuring that the Sovereign Grant will not fall in value for the next financial year.
This is patently not acceptable at a time of national economic calamity. The bailout by HM Treasury means that money that would have been spent on public services has now been diverted to the royals. This is expected to give the monarch a grant of £86.3 million for the year 2020-2021. Despite the Act guaranteeing the royals will never make a loss, the Sovereign Grant has ballooned in size, giving them year on year increases for the past decade above levels of inflation. In 2016-17 the grant was worth £42.8 million, which steeply jumped to £76.1 million in 2017-18 and continued to rise handsomely until this year. The royal family have a rising income under this system, but now they must ride the bad times like the rest of us. They should not forget the significant public sympathy which was generated when the Queen’s own wedding dress was rationed with clothing coupons in the midst of postwar austerity.
Today’s royals have hardly been as thrifty, showing little regard for value for money. The Sovereign Grant financial report uncovered that Prince Andrew squandered £16k on a private jet travelling to Londonderry from Belfast in his capacity as Patron of the Open Championship at Royal Portrush Golf Club in July. As eighth in line to the throne, ‘Air Miles Andy’ could have set an example by going on an affordable airline instead of a private jet.
The royals received further criticism for spending £1 million on refurbishing the home of Prince Richard, Duke of Gloucester. The Duke is classed as a ‘working royal’ because he attends more than 100 events on the Queen's behalf. But this hardly warrants a seven-figure refurbishment courtesy of the taxpayer.
Travel and palace refurbishments can be a justifiable expense for HM Treasury. Many members of the royal family conduct tours and attend events on behalf of HM Government and in pursuit of its foreign policy objectives. But when it comes to minor royals and short jollies to Europe, the monarchy must start to more properly live within its means and remember that the Sovereign Grant is gifted from the British taxpayer; it is not an entitlement.
The royals must not be sheltered from economic hardship, just like any other taxpayer-funded institution. Rather than year on year increases in the grant and taxpayer bailouts, the Sovereign Grant ought to be budgeted over several years like departmental expenditures. This way, we may finally see the royal family eliminate refurbishments for distant cousins and great nephews and prioritise the immediate family’s duties. We don't expect Prince Charles to sit on the back row of a Ryanair flight to a foreign engagement, but we do expect him to reign in his family’s growing costs.
By budgeting the costs of royal engagements, taxpayers can better assess value for money, funding a small but effectively resourced royal family which is less wasteful and more in tune with the public. This way, the monarchy will no longer be immune to economic hardship and share in the struggles of its subjects. This does not mean they will become a budget monarchy. But value for money applies to everyone - prince or pauper.