The coronation of King Charles III is drawing attention to the British Royal Family’s cost to the public. With the UK grappling with a cost-of-living crisis, the issue of cost is particularly relevant, as the monarchy’s true financial picture is difficult to ascertain. Most of the expenses for the Royal Family are paid for by a taxpayer-funded payment called the Sovereign Grant, which was set at £86.3 million ($108 million) in the 2021-2022 financial year.
The Crown Estate, which generates most of the money, cannot be bought or sold and is managed independently by a board approved by the monarch on the advice of the prime minister. The Sovereign Grant, previously known as the Civil List, is a set percentage of the profits that is given to the royal family each year. The Sovereign Grant does not include the cost of security for the Royal Family. Republic, an organization that lobbies for an elected head of state, has estimated the total annual cost of the monarchy to be £345 million ($431 million).
Norman Baker, a former Liberal Democrat member of parliament and author of And What Do You Do?: What The Royal Family Don’t Want You To Know, said the British monarchy is bad value, estimating that Queen Elizabeth’s private wealth alone would be subject to taxes of up to £400 million ($440 million) if she had not been a royal. Baker said members of Britain’s royal family have failed to learn from the modernising example of constitutional monarchies in Scandinavia.
Many of the Royal Family’s supporters argue that the money they receive is a drop in the bucket compared to the financial and other benefits they bring in. While the Royal Family’s effect on the economy is difficult to quantify, it is widely believed to be significant. Brand Finance, which bills itself as the world’s leading brand valuation consultancy, estimated that the Royals contributed £1.77 billion ($1.95 billion) to the UK economy in 2017 through the Crown Estate’s revenues and indirect benefits for tourism, trade, media, and the arts.
According to John Balmer, a professor of corporate marketing at Brunel Business School, the British Royal Family is an exceptional global brand, second only to the Pope. “The monarchy is also a heritage attraction in terms of tourism and in terms of promoting British brands,” Balmer said. “As a corporate brand, it also endorses other brands. Many institutions have a royal title, and this gives them prestige, such as The Royal Opera House, the Royal College of Art, Royal Ascot Races,” Balmer said. “Royal Warrants, where an organization is designated as being ‘by appointment to His Majesty the King’…”
The true cost of the Royal Family remains unclear, with most of their expenses covered by the Sovereign Grant. However, the Sovereign Grant does not include the cost of security for the Royal Family. Republic, an organization that lobbies for an elected head of state, has estimated the total annual cost of the monarchy to be £345 million ($431 million). Some critics argue that official figures underestimate the true burden on the taxpayer.
Norman Baker, a former Liberal Democrat member of parliament and author of And What Do You Do?: What The Royal Family Don’t Want You To Know, said that the British monarchy is bad value both on its own terms and in comparison to other constitutional monarchies. “It costs, even according to the palace’s own figures, twice as much as any other monarchy in Europe,” Baker said. “And actually, that is a grotesque underestimate because there are a number of benefits to the Royal Family that aren’t available to other monarchies in Europe, for example, the exemption from death duties.”
The Sovereign Grant, previously known as the Civil List, is a set percentage of the Crown Estate’s profits that is paid annually to the monarch to fund their official duties and the maintenance of their residences. The Crown Estate is a portfolio of properties and land that is owned by the monarch but managed by an independent organization called the Crown Estate Commissioners. The profits from the Crown Estate are considered public funds, and the Sovereign Grant is subject to parliamentary oversight.
The current percentage of the Crown Estate’s profits that is paid as the Sovereign Grant is 25%. This means that in 2022-2023, the Sovereign Grant will be £85.9 million ($114.8 million USD). The Sovereign Grant is used to fund a range of activities, including official travel, salaries for members of the royal household, and the maintenance of royal residences, such as Buckingham Palace and Windsor Castle.
It’s worth noting that the Sovereign Grant is not the only source of funding for the monarchy. The Queen also has her own personal wealth, which is estimated to be around £350 million ($466 million USD), and the Royal Family has other sources of income, including investments and commercial ventures.
In addition to the Sovereign Grant, the Royal Family also benefits from the Duchy of Lancaster and the Duchy of Cornwall. The Duchy of Lancaster is a portfolio of land and property that is owned by the monarch and provides an income for the Queen. The Duchy of Cornwall is a similar portfolio of assets that is owned by the Prince of Wales and provides an income for him and his family. The income from these estates is also subject to parliamentary oversight.
Overall, the funding of the monarchy is a complex and often controversial issue in the UK. While many people support the monarchy and believe that it provides important cultural and historical value to the country, others argue that the cost of maintaining the monarchy is too high and that the institution should be abolished or reformed. Ultimately, the future of the monarchy will be decided by the British people and their elected representatives.
