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ACM Home arrow Royal Finances arrow Monarchy produces bumper profit for taxpayers

Monarchy produces bumper profit for taxpayers Print E-mail
Written by Professor David Flint AM   
Tuesday, 17 July 2007

ImageHaving just been harangued in Australia by media stories about the alleged costs of the monarchy, the true story does come out occasionally. Rather than constituting a financial cost, the British government, and presumably the British taxpayer, has once again made a very handsome profit from the monarchy.
Until 1760, the costs of the Crown were paid by The King directly from his own revenues. From that time the practice developed of the Sovereign agreeing, for the term of his or her reign, to transfer the revenues – but not the underlying properties which produce the income - in return for what was called the Civil List. Even with other grants–in-aid, as payments additional to the Civil List are known, this has proved in recent years to be a bargain for the British government.
This profit is the net income the government receives from the Crown Estate and certain other hereditary revenues. This financial year the gross income was 184.8 pounds. In return, the government funds the costs of the British Crown, which last year were 37.4 million pounds. The profit therefore amounts to 147.4 million pounds. This is about 345 million Australian dollars.


Contrary to the suggestions of some, the government does not pay a salary or allowance for The Queen.  The Civil List and grants-in-aid are mainly to maintain official buildings and to perform the functions of Sovereign. Nor is any allowance or even provision for disbursements made by the Australian government for costs associated with the functions of The Queen of Australia, except of course in relation to State Visits, or as the Canadians put it, Homecomings.   As with any visiting minister or official, it is elementary that these costs include official gifts.  Do some journalists and underemployed republican politicians seriously think that when Mr Keating, for example, gave some memento of Australia to say, the President of Indonesia, Mr. Keating rather than the Australian Government paid for this?  Of course they don’t. They know that official gifts are in all instances charged to the costs of a ministerial or official visit.

Another canard is to add some accounting figure for security costs, as though the officers involved are not already employed to perform these services.  According to the London Daily Telegraph of 9 July, 2007, it is going to cost three million pounds a year to protect Mr Blair in retirement from terrorists; does that mean that he should never come to Australia on an official visit as say, Middle Eastern envoy, because our police will also be involved in providing security, and some underemployed politician will carry on about it?  

The fact is that the Royal Family and the Governor-General are deliberately singled out for “beat-ups” – stories - about so-called “costs,” as well as for questions in Parliament and in the Senate Estimates Committee.
This has nothing to do with obtaining and relaying information in the public interest. It is just another weapon in the political campaign to remove those constitutional checks and balances on the exercise of power which so annoy the political class.  I remember at the time of the 1999 referendum campaign suggesting to a prominent independent republican that the official republicans probably did not appreciate that their model would concentrate even more power in the prime minister of the day. His response was that they not only knew that, this was precisely the result they wanted.


For each Briton, this year, the cost of the Crown is about 62 pence but this is covered several times by the income from the Crown Estate.  And as Sir Alan Reid, Keeper of the Privy Purse, pointed out, the 62 pence “…is the annual cost, not the daily, weekly or monthly cost.” Sir Alan added:” We are pleased that the total cost of the Monarchy is now 7% lower in real terms than it was in 2001. The reduction in the amount of Head of State expenditure reflects the continuous attention the Royal Household pays to obtaining the best value for money in all areas of expenditure.
”In the current year there was a real decrease in expenditure of 2.7% due mainly to a reduction in refurbishment costs at the Palace of Holyroodhouse, offset by increased costs in dealing with a greater number of Freedom of Information enquiries. [DF:These would be mainly inquires from journalists many of which would not be bona fide inquiries, but campaigns to misuse the news columns to attack the Royal Family or invade their privacy.]


Sir Alan’s warning that various historic buildings are not being properly maintained attracted most media attention.ind this curious given that the real news was the bumper profit the government is making from the monarchy. In any event Sir Alan explained that: “…since the allocation of the Property Grant-in- Aid was fixed by the Government in 1991, it has effectively been reduced by 69 per cent in real terms. Now there is a critical backlog in maintenance projects and if our historic buildings are to remain safe it is essential that the grant is increased by £1 million per year."
The point is this, and the media should take.  The British government should give more of Her Majesty’s money back – after all it would be to maintain the national estate.


We must not forget that our Westminster system, with the constitutional monarchy at its heart, is the only stable and democratic model of government which both works for extended periods and has been successfully exported to other countries.  That is its principal benefit. But I would say that the fact that the monarchy effectively costs the British nothing, and is self financing, is surely another advantage.  When I pointed this out to a republican, he seethed as he asserted: “When Britain becomes a republic, we’ll nationalise the Crown Estate.” I pointed out that without just compensation that would be illegal under European and British law. The 2002 judgement in the case brought by the King of Greece about property stolen from him by Greek republicans demonstrates that, although the compensation ordered was grossly inadequate.

And let us not forget that another significant benefit of constitutional monarchy is its prodigious impact on trade. As we reported in this column on 9 March 2007, the marriage of Princess Mary to Crown Prince Frederik has led to a surge in trade between Australia and Denmark.  The UK travel authority, VisitBritain, has revealed that 57% of visitors to the UK cited the monarchy as the principal reason for coming.  According to Richard Palmer in the International Express, 27 March 2007, the resulting income for the UK is around 9.5 billion pounds – about twice the value of exports by the British arms industry.  And its not just the buildings, the most frequently asked questions at the Britain and London visitor centre concern the Changing of the Guard, The Tower, Buckingham Palace, Windsor and the State Opening of Parliament  

 
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