Royal Revenues

Article excerpt

Phillip Hall analyses the finances of Britain's monarchy, arguing that those who claim that the royals pay for themselves are misusing history.

SOME TIME THIS YEAR THE GOVERNMENT will make new arrangements to pay the Queen's Civil List for the next ten years and, judging from past experience, this will generate a good deal of media attention. The Civil List is nowadays spent mainly on royal household salaries, though originally, as the name suggests, it paid for the expenses of civil (as opposed to military) government. The whole issue of the cost of the monarchy was the subject of much critical comment in the media throughout the 1990s - involving such issues as the tax-exemption that the Queen formerly enjoyed, the expense of the royal train and the upkeep of the palaces.

The controversy has also revived a very old argument which states that when one takes into account the profits from the Crown Lands, surrendered by George III to Parliament in 1760, `the monarchy does not cost anything at all' and the state nowadays actually makes a profit from the royal family (The Spectator, March 20th, 1999). In 1998-99, the net rents from what is nowadays called the Crown Estate amounted to 125.8 million [pounds sterling], all of which went to the Exchequer. The total annual cost of the monarchy, including security, is about 70 million [pounds sterling]. The conclusion drawn is that most complaints about public money spent on the royal family are misplaced.

Arguments along these lines have appeared, amongst other places in recent years, in the Daily Telegraph, Sunday Telegraph, Financial Times, Guardian, The Times, Daily Mail, Express, Observer and during the Carlton TV debate on the monarchy in 1997 when the author and monarchist Frederick Forsyth advanced them during a noisy and controversial live discussion.

Some writers have suggested that the monarchy was about to take back the Crown Estate and become `self financing,' an idea attributed to Sir Christopher Howes, the present head of the Crown Estate, who is said to have suggested it to Prince Charles.

The reference to the Crown Estate is an example of how the past, or rather one version of the past, can be deployed in a contemporary debate. However, `the Crown Estate argument' or CEA - that the monarchy pays for itself through the profits of the Crown Estate - is bad history. It makes a direct comparison between the monarchy's finances in 1760 and those of today which, as we shall see, ignores massive changes in the institution. Moreover, newly discovered documents at the Public Record Office reveal how, in the first half of the twentieth century, important public servants at the Treasury warned against precisely this misinterpretation.

1760 was the year that George III began his long reign. He had previously been a critic of his grandfather, George II's relationship with Parliament on money matters, and was therefore committed to accept a different financial arrangement from his predecessor. George II had received various revenues, known as Civil List revenues, of which the rents from the Crown Lands were one. The total amounts they had raised varied from year to year. Instead, George III agreed to accept from Parliament a fixed Civil List each year, though later it was occasionally increased.

During the eighteenth century up to 1760, the King placed the Crown Lands at the disposal of his Treasury ministers, who arranged for valuable properties in central London and elsewhere to be let out at very low rents to their fellow parliamentarians in the Commons and Lords. The object was to induce them to vote for the government in Parliament and dissuade them from criticising ministers - thus keeping them `on message' in modern parlance. The Crown Lands only raised about 6,000 [pounds sterling] a year in 1760, a meagre amount even at that time. Their use as one of the `Influences of the Crown' to reduce opposition to royal government massively reduced the income they yielded. …