Financing the British Royal Family: Where does the Money Come From?
|The Privy Purse is used to fund the Queen's expenses as head of state. In this photo, U.S. President Barack Obama and First Lady Michelle Obama are welcomed |
by Queen Elizabeth II at Buckingham Palace in 2009. Image: Wikipedia.
Securing the necessary funds is vital for the operations of the British Royal Family. The Monarchy has, more often than not, been described as an expensive institution. However, the Royal Household works towards ensuring that the taxpayers' money is spent in the most efficient manner. So where does the Queen gets the money to fund their day-to-day activities?
The Sovereign Grant
Starting April 1, 2012 changes in the way the British Royal Family is financed have been implemented after the passage of the Sovereign Grant Act. The law abolished the Civil List and the three Grants-in-Aid (for Royal Travel, Communications and Information, and the Maintenance of the Royal Palaces) and were replaced with just one consolidated annual grant. Funding for the Sovereign Grant is already derived from 15% of the Crown Estate’s revenue. The Sovereign Grant’s share is subject for change every five years depending on the consensus of the Royal Trustees (the Prime Minister, the Chancellor of the Exchequer and the Keeper of the Privy Purse). The Queen’s Sovereign Grant was pegged as £45.6 million for 2016.
Duchy of Lancaster
The Duchy of Lancaster was established in 1399 as the sovereign’s private estate. It is held in trust to provide every reigning monarch a source of private income. The duchy covers 18,433 acres of land, which cannot be disposed but the surplus of the revenue is used to fund the Queen’s private and public expenses, as well as the activities of other members of the Royal Family. Among the properties of the duchy include the prime Savoy Estate in London, acres of rural lands in England and Wales, and historic properties, such as Lancaster Castle. As of March 2015, the Duchy of Lancaster’s assets are worth £495 million, yielding £17.6 million in profits.
Duchy of Cornwall
The Duchy of Cornwall was established by Edward III in 1337 for his son, Prince Edward. It is a private estate of the sovereign’s eldest son which covers over 53,000 hectares of land in England and Wales. Prince Charles is the current Duke of Cornwall and benefits from the income provided by the estate. It is governed by the original Charter and by Duchy of Cornwall Management Acts of 1863 and 1982. The Duke of Cornwall cannot dispose the assets of the estate but the revenue is used to cover the expenses incurred by the Duke and the immediate members of his family. As of March 2016, the estate has a net value of £877 million and yielded a profit of £20.5 million.
|Duchy of Cornwall office in The Old Rectory, Newton St Loe, Bath and North East Somerset|
The Queen’s undisclosed personal income is derived from her private fortune that includes the Balmoral Castle in Scotland, Sandringham House in Norfolk and other investments. The Queen inherited the Balmoral and Sandringham estates from her father, King George VI. Sandringham is now valued at $65 million while Balmoral is estimated to be worth $140 million. Similarly, other members of the British Royal Family also have their own sources of private income. For example, William and Harry derive an income from the trust fund set for them by the late Princess Diana.
Abolished Sources of Income
Civil List. When George III succeeded as King in 1760 he surrendered the income of the hereditary the Crown Estate to Parliament so he could free himself from the need to defray the cost of running the civil government (such as the Civil Service and salaries of judges' and ambassadors'). In return Parliament agreed to give him a certain amount of money for the expenses of the Royal Household. This arrangement was renewed every time a new monarch succeeded on the throne until Civil List was abolished when the Sovereign Grant Act was passed in 2011.
Parliamentary Annuities. Parliamentary annuities were funding received by members of the British Royal Family from Parliament. Except for the Duke of Edinburgh who receives a parliamentary annuity of £359,000 per annum, the rest of the Royal Family ceased receiving parliamentary annuity when the Sovereign Grant Act 2011 was passed. Subsequently, the expenses related to the official duties of the Princess Royal, the Duke of York, and the Earl and Countess of Wessex are paid by the Queen from the income of the Duchy of Lancaster.
|Sandringham House in Norfolk.|