This column has long argued – for many years we were alone - that The Queen and the Royal Family represent an extraordinary bargain for each of the sixteen realms over which The Queen reigns and for all of the countries which are members of the Commonwealth of which Her Majesty is Head.
Long presented by republicans as a drain on the taxpayers, the truth is this. Not only is the Royal Family entirely self funding -they actually produce a profit for the British taxpayer. The Queen is effectively paying taxes to the UK government at the extraordinary rate of 85%.
This benefit to the British Treasury and indeed the Australian, New Zealand, Canadian and other Treasuries, is quite apart from their tourist and promotional potential.
As for Australia, nothing - not a cent - has ever been paid to The Queen or any of the other members of our Royal Family. There is no salary, commission, or fees. We pay no superannuation, and there is no golden handshake. The same is true of Canada, New Zealand and the twelve other Realms.
The Queen and no member of the Royal Family receive any personal salary as, for example Presidents typically do.
Nor is there any provision for a pension or superannuation. (Incidentally, King Charles II magnanimously awarded a pension to Mrs. Cromwell, the widow of Oliver Cromwell. Cromwell as dictator during the republic had murdered his father after a mock trial.)
In fact the Queen does not retire; and abdication merely because of old age or convenience is ruled out.
In a desperate attempt to show some substantial taxpayer outlays, costs which are going to be incurred anyway, such as security are charged to visits, often on an inflated basis. Of course announcing this is in itself a serious security breach as it informs terrorists and others, but that does not seem to stand in the way of those with a political agenda.
At the time of the Royal Wedding in 2011, some republican commentators were attributing the cost of a public holiday to the Royal Family. The decision to call a holiday was the government's not The Queen's.
Apart from inappropriate and exaggerated attribution of "costs" to the Royal Family, we have also pointed out the fact that the British government and Parliament have failed lamentably to fulfil their side of an agreement made with The Queen at the beginning of her reign.
Because so many fail to appreciate these facts we repeat: The Queen does not receive a personal salary or pension as presidents do.
Until April 2012, a return of some – some- of the Crown's income were made to The Queen through the UK civil list and grants in aid. These were to maintain the official residences, and to pay the staff, the entertainment, and ceremonial and other functions head of state functions in the United Kingdom.
The Civil List and other grants-in-aid involved the government giving back a relatively small portion of The Queen’s money. The government kept the rest. This convention began in 1760. It was agreed then that the costs of the Crown would be paid from the Crown Estate and certain other hereditary revenues which would be handed over to Parliament.
From that time the practice developed of the Sovereign agreeing at the beginning of his or her reign to hand over these revenues during his or her reign to the Parliament in return for a Civil List.
In return Parliament would provide sufficient funds to allow The Queen to fund her state functions.
This has proved to be a bargain, at least in the present reign. But for decades the British politicians failed miserably to perform their side of the agreement. Notwithstanding inflation, the Civil List was frozen for about twenty years. None of the other Realms contributed. They do absorb some of the overheads relating to the time The Queen or a member of the Royal Family is in the relevant Realm, just as they do to their many foreign state visitors.
In Australia, these overheads have sometimes been artificially inflated by creative accounting, probably for the purposes of creeping republicanism.( In New South Wales, Government House was even purloined by the politicians for use for purposes including partisan politics, at least between the years 1999-2011. To read more go to the Main Menu and then to the section Return The Governor)
Unwisely, the attributed costs of providing security have sometimes been revealed. This is a dangerous practice as it reveals what security is normally provided, something which for elementary reasons should not be made public. A protest by ACM about this has been considered by the government.
The fact is The Queen and our Royal Family provide a unique an extraordinary bargain. That they also attract tourist and other revenue is of course also a relevant consideration. This is not only in the United Kingdom. A Royal Visit to Australia, for example, can attract international attention.
...new British arrangements...
ACM has long argued that the British arrangements should be reformed by all of the income of the Crown Estate being returned to The Queen, leaving it to Her Majesty to grant what is not needed in legitimate expenses to the British government.
In April 2012 the arrangements for the funding of The Queen’s Official Duties were reformed . The new system of funding, referred to as the ‘Sovereign Grant’, replaces the Civil List and the three Grants-in-Aid (for Royal Travel, Communications and Information, and the Maintenance of the Royal Palaces) with a single, consolidated annual grant.
The Sovereign Grant is designed to be a more permanent arrangement than the old Civil List system, which was reign-specific. Funding for the Sovereign Grant comes from a percentage of the profits of the Crown Estate revenue (initially set at 15%). The grant will be reviewed every five years by the Royal Trustees (the Prime Minister, the Chancellor of the Exchequer and the Keeper of the Privy Purse), and annual financial accounts will continue to be prepared and published by the Keeper of the Privy Purse.
The new system provides for the Royal Household to be subject to the same audit scrutiny as other government expenditure, via the National Audit Office and the Public Accounts Committee. The former in ACM's view should not be mandatory,in that the choice of auditor should be left to The Queen. The latter in ACM's view is entirely inappropriate, allowing unknown politicians to gain international status by grandstanding about the audited expenditure by the Crown of income of the Crown Estate.
In our view the allocation of the surplus of Crown Estate income remaining after covering state overheads should be a matter for determination by the Sovereign. There is for example a crying need to replace Britannia as a Royal Navy hospital ship and Royal Yacht. Those who know, recognize that this was a tremendous investment for the foreign relations, international trade and influence of Britain and the Commonwealth. Why should not the Palace discuss the allocation of the Crown Estate surplus over time to achieve this desirable objective?
ACM has long been alone in pointing out that our monarchy is in fact self funded, a point we made in The Sunday Telegraph on 14 July, 2013.
This is done through the Crown Estate, property and funds accumulated by the Crown. Nothing in the Crown Estate comes from the government. No taxes are involved.
The British government does not subsidise the monarchy. It’s the other way around and has been so during all of The Queen’s reign.
The practice began under King George III.
The fact is that the British government (and thus the British taxpayer) has profited handsomely from The Crown.
In addition, the monarchy is major tourist attraction for Britain , and a Royal Visit to Australia is invaluable in the world wide media attention it draws.
Australia taxpayers pay nothing to maintain The Queen of Australia. (Some of the overheads of a Royal Visit are absorbed in Australia - as are those of our many foreign state visitors. Just as some of the overheads of a state visit to another country by our Head of State, the Governor-General, are absorbed by the foreign government.)
Let me stress I am talking about absorbing overheads. The Queen does not receive a personal income salary nor is superannuation contemplated. Her Majesty makes no personal profit or return from taxpayer funds whatsoever. Nor does she from her Crown Estate.
ACM has been alone in proposing publicly that the British arrangements be reformed by the income of the Crown Estate being returned to The Queen, leaving it to Her Majesty to grant what is not needed to the British government for the welfare of the nation.
In any event, under new arrangements introduced in April 2012, 15% of the Crown Estate is to be returned to its owners the Crown. The government takes the rest.
But some in the press in the UK and Australia have not caught up with this.
In a major feature on 7 July , in Australia’s most read newspaper, The Sunday Telegraph, “The Crown’s Hidden Jewels, ” Australia based Sarah Le Marquand and UK based Charles Miranda jointly wrote that “the cost to the taxpayer of running the monarchy currently sits at $54.73 million....” This is not so. Rather than costing the (British) taxpayer $54.73 million, the monarchy is self funded.
Rather than paying, British taxpayers received over $300 million this year from the Crown Estate.
The Sunday Telegraph quite rightly published my letter along these lines in its issue on 14 July 2013.
Ladies and Gentlemen of the press: Say after me, " The monarchy pays for itself."
There can be no doubt that the hereditary revenues of the Crown, including the Crown Estate and the Royal Duchies, are the Crown’s.
The argument of some journalists that the taxpayer funds the monarchy is completely misleading; given their agenda, probably deliberately so. They revel in stories about a “rise for The Queen”. The point is that we are talking about the costs of the monarchy, not some personal income for The Queen.
[ King George III - began the practice.]
(We now know that some of them were prepared not only to behave unethically, but also in breach of the law. The current scandal in Britain began when it was realised that the message banks of Prince William and Prince Harry were being hacked for the News of the World.
More recently, royal protection officers have been accused of betraying the Queen by selling information on her movements and telephone details to the same newspaper with other accusations that these crimes were being committed by other newspapers.)
The fundamental fact is this. As we have long argued here, the ownership of the Crown Estate is vested in the Crown.
...evolution of funding...
Now there are areas of the law which are not absolutely neat and clear-cut. This is particularly so in a society which has lived under the rule of law longer than most and where the constitution has evolved as it has in the United Kingdom.
The Crown used to pay for the expenses of the government from its own purse. This has gradually evolved so that Parliament now supplies the government with its funds from taxation. A government which cannot obtain supply must resign, as we saw in Australia in 1975.How then are the non- governmental expenses of the Crown covered? The practice for the last two centuries has been this.
At the beginning of a reign, the King or Queen has agreed to hand the revenues from the Crown Estate to Parliament. In return the Parliament – which incidentally includes the Sovereign – grants a Civil List ‘for the support of the Royal Household and of the honour and dignity of the Crown.’Could a monarch refuse to hand over the revenues of the Crown estate?
Is this a matter in the discretion of the King or Queen or is it now an established constitutional convention?
One of the most authoritative constitutional lawyers, the late FW Maitland, concluded that Parliament seems to think that a King or Queen “could not, even with Parliament's concurrence deprive his (or her) successors of their hereditary right.” Alternatively, he said, Parliament might have thought that it would not be fair to ask a King to do that.
The important principle surely is the King or Queen should enjoy a great degree of financial independence from the government of the day. Vernon Bogdanor, an authority on the Crown rightly l points out that, the private secretary’s department works for all the Realms and not just for Britain, and "these Commonwealth monarchies are completely independent of the British government. It would not therefore be constitutionally proper to obtrude the United Kingdom Parliament or British ministers into the relationship between the sovereign and other Commonwealth monarchies.”
To this should be added the need for the office of the head of the Commonwealth also to be completely independent.
..Civil List unsustainable...
Because of inflation, the Civil List has had to be supplemented by specific grants-in-aid. In presenting the Sovereign Grant Bill to the House of Commons, the Chancellor of the Exchequer, Rt Hon George Osborne MP said the current Civil List arrangements are no longer sustainable. They are inflexible, less than transparent and rely on a reserve of public funds that is about to be depleted.Under the new arrangements, the Civil List will be superseded by a Sovereign Grant presently fixed at 15% of the revenues of the Crown Estate, with a floor to protect against unusual variations in the revenues.
We remain of the view that all the revenues go to the Crown with The Queen deciding how much should go to the Government was not adopted. While an audit is appropriate we do not think that the Public Accounts Committee should have any role in this matter. From the scandals which occurred during the last Parliament, the politicians are hardly the ones which should be making judgements about the royal accounts
Worse, every so often a politician will emerge wishing to make a name in the media. He or she will focus on some minor matter in the accounts and make extravagant and baseless allegations designed to present some quite legitimate expenditure as some sort of profligacy. Why give such people an avenue for self publicity?
In the meantime, our attention has been drawn byThe British Monarchist League to an observation made in the House of Commons by Jacob Rees-Mogg MP on 30 June 2011.
He said: “There is no requirement on a new sovereign to agree to hand the Crown Estate over in return for a civil list. The honourable member for North Durham (Mr Jones) said that this is taxpayers’ money and not the Crown’s money, but it really is the Crown’s money because, on becoming King, the Prince of Wales or any other sovereign could simply rescind the agreement and claim it back. The Crown Estate is the sovereign’s property, which the sovereign gives to Parliament to help to pay for the costs of the nation; it is not taxpayers’ money that is being handed over. ”
As Thomas J. Muscatello-DeLacroix Mills, the Secretary General, of British Monarchist League says:
“ This should put to rest how the Crown Estate is viewed in Britain by the MP's. There is no doubt that any attempt to abolish the Crown would result in a huge legal battle surrounding the royal family, but as this question and answer session shows we all know exactly who controls and has claims to what. The Crown Estate is not owned by the public and the public do not pay out of their own taxes to operate the Crown.”
Our monarchy is truly an extraordinary bargain. Travel and similar costs incurred during Royal visits and homecomings are more than balanced by the fact that we Australians, (or Canadians, New Zealanders, Jamaicans and the citizens of other Realms) pay nothing at all – salaries, allowances, superannuation or golden handshakes - to The Queen of Australia or to any member of the Royal Family.
They give their services for nothing.
The situation in Britain is that the Monarchy is completely self funded. The taxpayer pays nothing to fund the Monarchy. Rather the monarch endows the Government with surplus income from the Crown Estate.
Since 1760, successive monarchs have agreed at the beginning of their reigns to hand over the revenues from their Crown Estate to Parliament in return for a Civil List. Frozen for a decade, this is now supplemented by grants-in-aid which provide specific funding for royal palaces, communications and transport for official business.
In 2009/10 all payments to the Crown came to about £30 million. But the British government received £211 million from the Crown Estate. So the government made a very substantial profit from The Queen’s Crown Estate – about £181 million.
Previous British governments have failed to fulfil their side of the understanding about the revenue from the Crown Estate. They have not returned sufficient funds to the Sovereign to perform her role and function and to maintain the fabric of those buildings which form part of the national heritage.
...Sovereign Grant Bill...
We seem to be entering into a new phase in this financial relationship. An understanding has been reached between the Palace and the Government for significant reform.. In late June, the Chancellor of the Exchequer, Rt Hon George Osborne MP, presented the Sovereign Grant Bill to the House of Commons.
This was preceded by a message from The Queen which invited Parliament to consider the provisions of the Bill. And as the Chancellor said, the simple fact is that the current Civil List arrangements are no longer sustainable. He said that they are “inflexible, they are less than transparent and, critically, they rely on a reserve of public funds that has steadily been run down and is about to become depleted.”
Under the new arrangements, the Civil List will be superseded by a Sovereign Grant presently fixed at 15% of the revenues of the Crown Estate, with a floor to protect against unusual variations in the revenues. Unsurprisingly the suggestion made here that the revenues go to the Crown with The Queen deciding how much should go to the Government was not adopted.
If the government were to grant an award to the public servant who has made the greatest effort over the last year to manage expenditure, Her Majesty The Queen would be a strong contender, declared The Spectator in an editorial on 9 July, 2011.
"The Royal public finances published this week reveal that the cost of running the Royal household has fallen over the past year by 5.3% to £32.1 million,” the journal added. Extracts from the editorial follow.
“Proportionally, The Queen has made more cuts in one year then George Osborne (Chancellor of the Exchequer) intends to do over five.”
“The Royal household is now costing the taxpayer less in absolute terms than it was in 2007.”
“Had the British government reduced total costs by 5.3%, the structural deficit would have been eliminated already –and the era of austerity ended.”
“It is counterintuitive that an unelected monarchy should act more wisely with public money than an elected government. But anyone who tries to argue the monarchy is a drain on the taxpayer should look at the French model. The cost of running Nicolas Sarkozy's household have almost trebled since he entered the Elysée Palace.”
“Those who dragged Marie Antoinette to the scaffold would be astonished to see the airs and graces acquired by the leaders of the Republic.”