Great Britain’s monarchical profitability

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The Belarusian National Technical University

Research work

on the topic: Great Britain's monarchical profitability

Prepared by:

Valentina Korolionok

Minsk 2014

Content

Introduction

1. Sources of funding

2. How the finances are used

3. Cost of the monarchy

Conclusion

Referances

Introduction

There is much speculation about the profitability of the monarchy maintenance in Great Britain. Nowadays there are not many countries with the monarchical forms of government, in which maintenance of traditions remains a very important aspect of country's life for years and even centuries. The British are concerned about what sums of money are allocated from the budget for this purpose. In this report I will present some facts about the maintenance of the monarchy in the UK in order to present my point of view, to estimate the profitability of the monarchy maintenance as well as to state how much the British monarchy costs to the budget and to an ordinary taxpayer.

1. Sources of Funding

The monarchy is the oldest institution of government. Today, the Queen is not the only Head of State, but also an important symbol of the national unity. The British Royal Family is financed mainly by public money, but there are also a number of private sources of income. The monarchy is expensive, very expensive. There are three sources of funding for The Queen, or officials of the Royal Household acting on Her Majesty's behalf, in both a public and private capacity.

1) The Sovereign Grant. This is the amount of money provided by Government to the Royal Household in support of The Queen's official duties, including the maintenance of the Occupied Royal Palaces: Buckingham Palace, St James's Palace, Clarence House, Marlborough House Mews, the residential and office areas of Kensington Palace, Windsor Castle and the buildings in the Home and Great Parks at Windsor, and Hampton Court Mews and Paddocks.

The first Annual Report covering some new arrangements under the Sovereign Grant was for the year to 31 March 2013 and was published in June 2013. This report caused the storm of resentment among the British public. The reasons will be discussed later.

2) Privy Purse and Duchy of Lancaster. This is a historical term used to describe income from the Duchy of Lancaster, which is used to meet both official and private expenditure by The Queen. The Duchy of Lancaster is a portfolio of land, property and assets held in trust for the Sovereign in his/her role as Sovereign. It is administered separately from the Crown Estates.

Its main purpose is to provide an independent source of income, and is used mainly to meet expenses incurred by other members of the Royal Family.

In order to underline that the problem of reducing the amount of money spent for maintenance of the monarchy is very relevant, I would like to quote Sir Alan Reid, Keeper of the Privy Purse: “In the year of the Queen's Diamond Jubilee and the London Olympics, the Royal Household has achieved a real terms reduction in expenditure on supporting the Queen's official duties. The Royal Household has continued to reduce its expenditure funded by the taxpayer in successive years since 2008/09, achieving a real-terms reduction of 24% over the last five years.”

3) The Queen's personal wealth and income The Queen's personal income, derived from her personal investment portfolio and private estates, is used to meet her private expenses. The Queen owns the Balmoral and Sandringham Estates, which were both inherited from her father. Estimates of The Queen's wealth often mistakenly include items which are held by her as Sovereign on behalf of the nation and are not her private property. These include the official Royal residences, the majority of art treasures from the Royal Collection and the Crown Jewels. The Queen cannot sell these - they must pass to her successor as Sovereign.[1]

2. How the finances are used

The various official sources of funding are used entirely to support The Queen's work as Head of State. This means that the money goes towards a number of resources which enable Her Majesty to carry out her official duties. These include: Royal travel for official engagements in the UK and overseas; the maintenance of Royal residencies which are used for formal entertaining and ceremonial events; funding for the work of The Duke of Edinburgh which supports and complements that of The Queen and salaries for employees of the Royal Household who support and administrate the work of Her Majesty as Head of State.

According to Forbes, the Queen's personal net worth is estimated to be $500 million. An interesting feature is that the Queen pays tax.

3. Cost of the monarchy

The total cost of the monarchy to the British taxpayer varies depending on which elements are included in the calculations. Reports filed by the Royal Household state that total annual expenditure, as of March 2012, was Ј32.4 million (it does not include the cost of security provided by the police and the Army, the lost revenues of the Duchies of Cornwall and Lancaster and other expenses). It is very little to keep such an important tradition alive.

But prices are rising, as we know, all the time, so the Queen's official expenditure increased by Ј900,000 from Ј32.4 million during the 2011/12 financial year to Ј33.3 million in 2012/13, according to the royal public finances annual report.

There was also an increase in spending on property maintenance - money used for the upkeep of royal residences and other buildings - from Ј8.9 million to Ј9.1 million.

Payroll costs increased from Ј17.5 million to Ј18.3 million.

The taxpayer funds used to pay for official air and rail travel at home and abroad for members of the Royal Family fell by Ј500,000 from Ј5 million in 2011/12 to Ј4.5 million in 2012/13.

However, when all of the items are included, then the real cost, according to the anti-monarchy pressure group Republic, is between Ј134 and even 200 million pounds per year. britain financial taxpayer

The Treasury contributed the equivalent of 69 pence per person in the country to enable The Queen to carry out the duties of Head of State.

This is the annual cost for 2012, not the daily, weekly or monthly. Now that is a bit more.

But we should not forget about the positive aspect of the monarchy.

For example, the British tourism agency has reported that the royal family generates close to 500 million pounds every year in tourism revenue, drawing visitors to historic royal sites like the Tower of London, Windsor Castle, and Buckingham Palace. Tourism is the third-biggest industry in the U.K., the tourism board claims, and supports about 2.6 million jobs -- or about one in 12. What's more, a British firm called Brand Finance, which evaluates "intangible assets," said the royal wedding alone boosted London's economy by 107 million pounds.

“The monarchy costs 69p a year for every person in Britain, or Ј1.33 per taxpayer. In return, besides the Crown Estate profits, there is the unquantifiable, but enormous, tourist revenue it generates. Claims that a republican head of state would be less costly are absurd.” [2] (The Telegraph)

Conclusion

The Royal Family does not sit inside Buckingham Palace from 9-5 every day, posing for pictures with tourists for $25 a pop. They put on charity events, they travel to meet with foreign dignitaries, and occasionally they have military duties (William is in the Royal Air Force).

Finally, I want to quote The Telegraph:

“Although the monarchy undoubtedly represents value for money, its true worth cannot be expressed in financial terms. It is the personification of the nation, the embodiment of British national identity. The monarchy is living history, a pageant of our past that remains relevant in the present and will continue to do so in the future. Constitutionally, it is the guarantor of stability: during the political impasse that followed the general election and the protracted negotiations, our governmental process did not miss a beat, since the Queen remained as the constitutional authority, ensuring continuity.”[2]

In my opinion, the phenomenon of the British monarchy has a right to exist in our modern world not only because it helps to make profit, attracting tourists to the country, but also it is one of the most ancient traditions at its best.

References

1) The official website of The British Monarchy.

2) The Telegraph news UK.

3) Antimonarchical group “Republic”:

4) The Guardian News.

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