By Ben Phillips
June 4th 2012
Buckingham Palace’s website assures its readers the Royal Household is:
“…committed to ensuring that public money is spent as wisely and efficiently as possible, and to making Royal Finances as transparent and comprehensible as possible.”
Likewise, supporters of the British monarchy are fond of claiming that the Royal Family represents excellent value for money. Writing in the Telegraph two years ago, Gerald Warner stated the case thus:
“The monarchy costs 69p a year for every person in Britain, or £1.33 per taxpayer. In return, besides the Crown Estate profits, there is the unquantifiable, but enormous, tourist revenue it generates.
Claims that a republican head of state would be less costly are absurd. The German presidency costs about the same as the Queen, but how many tourists line the streets of Berlin to catch a glimpse of – er – what is his name?”
There are serious flaws in this argument. This weekend, marking the Queen’s Diamond Jubilee, places the monarchy more squarely at the centre of public attention than at any point in recent decades.Now is the perfect moment to challenge popular conceptions about precisely what the Royal Family costs the taxpayer, and how it is financed.
Both these issues came to the fore in a report published last year by the campaign group Republic entitled The ‘Value For Money Monarchy’ Myth. The initial problem with the royal finances, the report makes clear, is that Buckingham Palace’s own claims about the cost to the taxpayer are extremely dubious.
The Palace estimates a total of £40m per year: Republic, on the other hand, estimate an annual cost of £202m, a figure which makes the British monarchy ‘one of the most expensive, wasteful and financially irresponsible institutions in the world‘. Where does the discrepancy come from? The means by which Buckingham Palace arrived at its figure deserves scrutiny.
For one thing, many significant areas of expenditure are simply not included in the overall figure. The costs of providing security are omitted, as are royal travel arrangements that cater to Prince Charles’s expensive tastes and include the continued use of the controversial royal train. Similarly, the substantial revenues the monarchy generates from the Duchies of Lancaster and Cornwall go without mention on the grounds that neither Duchy is the personal property of the House of Windsor.
Then there is the Civil List, which has covered “the official expenses of the Queen’s household” with an annual £7.9m grant since 1990. It is this figure that the Palace’s estimates make use of. In 1990, however, this grant considerably overestimated inflation. As such, the monarchy has been able to build up a significant reserve, allowing a dramatic increase in Civil List expenditure over the past two decades. From £4.9m in 1991, the Civil List had reached £14.2m by 2010, a 94% real terms increase.
Republic, who factor in all the above expenditure, contextualise their figure by comparing it first to some key elements of the coalition government’s deficit reduction scheme. The monarchy’s cost to the taxpayer, for example, is almost precisely equivalent to the reduction in funding for SureStart, or the savings expected to result from housing benefit reform.
Just as sobering is the subsequent comparison to other European monarchies and semi-presidential systems of government. By Republic’s estimate, the British monarchy is the most expensive in Europe, more than twice the annual cost of its nearest competition (the Dutch monarchy, which costs £88.3m per annum) and 112 times more expensive than the Irish presidency. However one looks at it, it’s clear that the ‘value for money’ argument only adds up with an extremely selective approach to the monarchy’s expenditure.
This issue of what the Royal Family claims to cost British taxpayers, as opposed to what it really costs, is problematic enough. From next year, however, those who believe in genuine transparency and accountability at the very top of the British state will have another headache, with the abolition of the Civil List and the introduction in its place of the Sovereign Support Fund.
Proposed as “a modern, transparent and simpler way of funding the head of state”, the Sovereign Grant is a single payment to the Queen based on 15% of the Crown Estate’s revenue for the past two years. The Treasury claim that ‘the net effect of this alteration will be no financial change’; rather, they suggest, ‘it just tidies things up’. Two problems, however, have emerged with the reform.
First, tying royal expenditure to the Crown Estate’s revenues is extremely odd. Contrary to popular myth, the Crown Estate has never provided for the upkeep of the monarchy, rather serving the Treasury exclusively. As Republic point out, it is ‘not the personal property of the monarch and the Queen is not entitled to receive any monies from it’.
Second, the Crown Estate’s targeted profits for 2013 are £250m, which would yield an initial Sovereign Grant of £37.5m. Yet the scheme’s announcement, in October 2010, came mere months after George Osborne’s austerity budget, in which he announced the reduction of royal expenditure to £30m. In effect, the Sovereign Grant will give the monarchy a degree of financial license out of kilter with virtually all other public expenditure at a time of supposed austerity.
If the monarchy is to retain public confidence in the future, a great deal more transparency and accountability is required. The Jubilee is the right moment to begin demanding it.
Originally published by Left Foot Forward
By Ben Phillips
June 4th 2012
Buckingham Palace’s website assures its readers the Royal Household is:
Likewise, supporters of the British monarchy are fond of claiming that the Royal Family represents excellent value for money. Writing in the Telegraph two years ago, Gerald Warner stated the case thus:
There are serious flaws in this argument. This weekend, marking the Queen’s Diamond Jubilee, places the monarchy more squarely at the centre of public attention than at any point in recent decades.Now is the perfect moment to challenge popular conceptions about precisely what the Royal Family costs the taxpayer, and how it is financed.
Both these issues came to the fore in a report published last year by the campaign group Republic entitled The ‘Value For Money Monarchy’ Myth. The initial problem with the royal finances, the report makes clear, is that Buckingham Palace’s own claims about the cost to the taxpayer are extremely dubious.
The Palace estimates a total of £40m per year: Republic, on the other hand, estimate an annual cost of £202m, a figure which makes the British monarchy ‘one of the most expensive, wasteful and financially irresponsible institutions in the world‘. Where does the discrepancy come from? The means by which Buckingham Palace arrived at its figure deserves scrutiny.
For one thing, many significant areas of expenditure are simply not included in the overall figure. The costs of providing security are omitted, as are royal travel arrangements that cater to Prince Charles’s expensive tastes and include the continued use of the controversial royal train. Similarly, the substantial revenues the monarchy generates from the Duchies of Lancaster and Cornwall go without mention on the grounds that neither Duchy is the personal property of the House of Windsor.
Then there is the Civil List, which has covered “the official expenses of the Queen’s household” with an annual £7.9m grant since 1990. It is this figure that the Palace’s estimates make use of. In 1990, however, this grant considerably overestimated inflation. As such, the monarchy has been able to build up a significant reserve, allowing a dramatic increase in Civil List expenditure over the past two decades. From £4.9m in 1991, the Civil List had reached £14.2m by 2010, a 94% real terms increase.
Republic, who factor in all the above expenditure, contextualise their figure by comparing it first to some key elements of the coalition government’s deficit reduction scheme. The monarchy’s cost to the taxpayer, for example, is almost precisely equivalent to the reduction in funding for SureStart, or the savings expected to result from housing benefit reform.
Just as sobering is the subsequent comparison to other European monarchies and semi-presidential systems of government. By Republic’s estimate, the British monarchy is the most expensive in Europe, more than twice the annual cost of its nearest competition (the Dutch monarchy, which costs £88.3m per annum) and 112 times more expensive than the Irish presidency. However one looks at it, it’s clear that the ‘value for money’ argument only adds up with an extremely selective approach to the monarchy’s expenditure.
This issue of what the Royal Family claims to cost British taxpayers, as opposed to what it really costs, is problematic enough. From next year, however, those who believe in genuine transparency and accountability at the very top of the British state will have another headache, with the abolition of the Civil List and the introduction in its place of the Sovereign Support Fund.
Proposed as “a modern, transparent and simpler way of funding the head of state”, the Sovereign Grant is a single payment to the Queen based on 15% of the Crown Estate’s revenue for the past two years. The Treasury claim that ‘the net effect of this alteration will be no financial change’; rather, they suggest, ‘it just tidies things up’. Two problems, however, have emerged with the reform.
First, tying royal expenditure to the Crown Estate’s revenues is extremely odd. Contrary to popular myth, the Crown Estate has never provided for the upkeep of the monarchy, rather serving the Treasury exclusively. As Republic point out, it is ‘not the personal property of the monarch and the Queen is not entitled to receive any monies from it’.
Second, the Crown Estate’s targeted profits for 2013 are £250m, which would yield an initial Sovereign Grant of £37.5m. Yet the scheme’s announcement, in October 2010, came mere months after George Osborne’s austerity budget, in which he announced the reduction of royal expenditure to £30m. In effect, the Sovereign Grant will give the monarchy a degree of financial license out of kilter with virtually all other public expenditure at a time of supposed austerity.
If the monarchy is to retain public confidence in the future, a great deal more transparency and accountability is required. The Jubilee is the right moment to begin demanding it.
Originally published by Left Foot Forward