Royal Riches: What the Monarchy Costs Great Britain

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Royal finances: what the monarchy costs Great Britain
AP/Lefteris Pitarakis
Here's a paradox about Great Britain. In many ways, it's a more progressive country than the United States, its colonial offspring. It has a more generous welfare state (including national health care), a more progressive tax structure, and a third major political party to the left of Labour. Most workers are entitled to at least 28 paid days of vacation per year, and same-sex marriage will soon be legal throughout England and Wales.

And yet Great Britain maintains one of the most conservative institutions on the planet: a hereditary monarchy, something Americans would never countenance. This despite the fact that King Charles I lost two civil wars, leading to his own decapitation and the short-lived abolition of the monarchy, in the mid-17th century.

Though the royal family's political significance has long since been reduced to the ceremonial, the Windsors still have a massive financial footprint. As sovereign, the Queen owns the Crown Estate, a property portfolio worth £8.1 billion ($12.4 billion) as of last month -- the first time its value has exceeded £8 billion. It includes a lot of prime real estate -- "large parts of London's West End," "15 retail parks in various towns and cities," shopping centers, offices, agricultural lands, forests, and "most UK coastline," according to the BBC -- and 15 percent of its annual revenues is used to fund the monarchy. The rest goes to the Treasury.

As a result of the these assets' recent performance, the Queen is getting a raise: the Sovereign Grant, as her cut of the Crown Estate's revenues is called, is set to increase next year from £36.1 million to £37.89 million (more than $55 million) -- a gain of 5 percent, and the second consecutive bump to her allowance.

"The Crown Estate as a whole dates from the time of the Norman Conquest," explains the monarchy's official website -- more than 900 years ago -- but the current arrangement came into effect in 1760. That was the year King George III -- the intolerable tyrant of the Declaration of Independence -- signed the revenues over to the Treasury, and in return stopped having to pay for the civil government, the national debt, and his own personal debt. Those expenses were covered by something called the Civil List, funded by the Treasury and supplemented more recently by grants from other departments, until the Sovereign Grant Act of 2011. Buckingham Palace called the change "a modern, transparent and simpler way of funding the head of state," but opponents of the monarchy are unconvinced. "Pegging royal funding to Crown Estate revenue makes no sense at all," said the group Republic, which advocates replacing the Queen (or King) with an elected head of state. "The two are not related. Crown Estate revenue has always been there to provide funds for the government."

Republic has challenged the monarchy's claims of transparency, as well as official estimates of how much the royal family costs the country. In a 2010 report, "The 'Value for Money Monarchy' Myth," the group claimed that taxpayers shelled out £202.4 million ($310.7 million) the previous year to fund the monarchy, "around five times the official figure published by the royal household". The disparity is explained by the costs of "round-the-clock security, lavish royal visits and lost revenue from the Duchies of Lancaster and Cornwall" (partially tax-exempt real estate holdings belonging to the crown), all of which were ignored in the numbers made public.

The counterargument is that the revenues generated by the Crown Estate, surrendered by George III 250 years ago, either far exceed the amount of money allotted to the royals or come close to matching it, depending on which figure you use for the monarchy's cost. So the Windsors are either a source of profit for the government, or a negligible expense. But British republicans don't accept that the Crown Estate belongs to the Monarch: As the Centre for Citizenship insists, "The Crown Estate is, in fact, the property of the people of Britain. The Windsors have no more right to it than the Prime Minister has to 10 Downing Street."

Graham Smith of Republic agrees:

The Queen owns property in an official capacity and in a private capacity. Some things she owns as Queen Elizabeth, other things she owns as Elizabeth Windsor.

Property owned by Elizabeth Windsor is rightly hers and will remain so in a republic. Property owned by Queen Elizabeth would cease to be hers if she ceases to be Queen.

So if Parliament declares the throne vacant and passes the Crown to the people, as it has had the power to do since 1689, then Great Britain loses its monarch, but "the nation keeps the palaces, the art, the jewels and the land."

Smith believes that all this would be on sound constitutional footing, but beyond the legalities, he sees an objectionable mindset lying behind the financial case against Britain's becoming a republic: "the underlying message of the 'it's going to cost us millions/billions' argument is that we should allow ourselves to be held ransom by one family." And it's not as though the Windsors would be hard up for cash if they were to lose their income from lands held in trust: According to Forbes, the Queen's personal net worth is estimated to be $500 million.

As for the claim that the monarchy stimulates the British economy by encouraging tourism, the comedian Mark Steel has a ready reply: "Do the tourists who visit Paris stand at the top of the Eiffel Tower and think 'Hmm, well it's quite a nice view, but the lack of a monarch seems to spoil it'?" Steel may be onto something: According to Travel + Leisure's July 2012 list of "Europe's Most-Visited Tourist Attractions," Versailles, the home of France's final king, is the continent's most popular palace, seeing more annual visitors than any site in Britain. In fact, all four of the British attractions on the list are museums; there's not a royal spot among them.

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Adam Bowley

The point people need to get is, that getting rid of the monarchy is not going to be easy. I support the monarchy and even i CAN admit it is hard to say who owns what. What republicans in my country forget this, in a sense they are breaking their own principles and laws, EU laws, and human rights and international law. They do this by saying if there was no Queen the land etc goes to the people. This just does not happen at all and could cause a lot of conflict and law suits.

You cannot talk something away from someone based on that fact they own it in trust.

Here is what a fair and democratic country would do.

1. Crown Estates which are owned by the monarch in trust, but who does not own the revenues. Currently, legally the Monarch would be able to claim the estates and revenues if the gov decide that the monarch was not allowed money from the "public". This has not happened, therefore they have said 15% of the profits will go to the monarchy to pay for the official costs. Offical costs mean, official palaces/castles, (up keep) travel for public duties, costs to public duties such as dinners and vists etc, up keep of gardens etc and staff which number over 200 people, 75% Goes to the gov of the day. In a republic, the Crown would no longer exists thus the trust that holds all of these estates and areas under the Crown Estates will no longer exist. Unless the entail says different. So in a republic the Crown Estates would either be sold, divided among the Windsors, Nobles, and Church and gov, or stay as one and give the Windsors someone money known as a settlement.
2, The Duchies , Lancaster and Cornwall. If the current law in parliament gets passed then the Duchy of Cornwall, will lose its powers and status, thus becoming a "normal" estate and under the law even more private, While the duchy of Lancaster has always been a private estate with powers and at a later date this could go the same way as the duchy of cornwall. If this does not happen, it does not change anything. In a republic either this will happen and the Windsors will keep the duchies or they will get money for them, and the gov will take them over. And seeming they get money directly from the duchies, they would win this case in the courts in this country the EU and , UN as in a republic we would be taking away an income.
3. The Royal Collection- is owned by the Queen, "The Royal Collection is held in trust by The Queen as Sovereign for her successors and the nation". So in a republic, it would be divided into at least 2, what the Windsors have and what the state will have. As this collection has many personal things in it. If this is not done the courts could order the taxpayer/ gov to pay a huge some of money, as the royals use the collection all the time.

July 16 2014 at 7:08 PM Report abuse rate up rate down Reply
1 reply to Adam Bowley's comment
Adam Bowley

i could go on but cba

July 16 2014 at 7:26 PM Report abuse rate up rate down Reply
Floyd Pitts

I currently get your reports/is this "in addition to"

October 30 2013 at 3:03 PM Report abuse rate up rate down Reply
english

Off with their heads. "Royal" indeed.

July 25 2013 at 4:02 PM Report abuse rate up rate down Reply
kitsmom1990

The Obamas cost us almost as much. In fact last year King and Queen Obama spent more than the British Royal Family. At least British Royalty pay their way through tourism. Obama is just a drain. All hail King Obama.

July 25 2013 at 2:26 PM Report abuse rate up rate down Reply
bettebeegreen

It's really sad that the Brits and their holdings (Ireland, Scotland, and others) can't stop fawning over the Monarchy. I read that Prince Charles's "man servant" actually puts toothpaste on his brush for him. I wonder if he can go to the bathroom himself?? It's outrageous that their economy is always on the downer, but the Queen and family get paid billions. They should take all of their palaces, turn them into FOR PROFIT museums and turn the palaces into Bed and Breakfast Inns. Let them get jobs. This is the 21st Century

July 25 2013 at 2:00 PM Report abuse -1 rate up rate down Reply
criterion29

Well Britain, has a lot less freeloaders than the US

July 25 2013 at 1:41 PM Report abuse rate up rate down Reply
1 reply to criterion29's comment
phbotham

Of course they do! GB has a population of 62M, US has a population of 313M. More in GB are on the dole percentage wise than in the US.

July 25 2013 at 5:05 PM Report abuse rate up rate down Reply
dross4319

If Obama wre impeached, we'd have Biden as president.......do we really want that? He makes Barrack look like a schoolboy.

July 25 2013 at 1:20 PM Report abuse +2 rate up rate down Reply
atabak3701

Slavery gives less rights to some people. Royalty gives more rights to some people. So what is the difference other than the number of people who have a free ride?

July 25 2013 at 1:19 PM Report abuse rate up rate down Reply
DaltonCooper

Not nearly as much as the current president costs the United States and regardless of what the president thinks this new additon is much cuter than the president.

July 25 2013 at 1:06 PM Report abuse rate up rate down Reply
1 reply to DaltonCooper's comment
sam54ct

Foolish comments should be saved for drinking buddies, EVERY President costs the taxpayer the precise same amount, whether we like them, or not.

July 25 2013 at 2:00 PM Report abuse rate up rate down Reply
DaltonCooper

Better to have real Royalty than "make believe" as we have in the White House.

July 25 2013 at 11:16 AM Report abuse rate up rate down Reply