Does the Royal Family really make financial sense for the UK economy?

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Prince Harry will marry Meghan Markle within the St George Chapel of Windsor Citadel on Saturday 19 Might. The price of the marriage itself – the meals, the Ralph & Russo Couture gown and many others – will probably be picked by the Royal Household.

However the safety prices have been estimated at greater than £20m. And that will probably be borne by the general public purse.

But the marriage may also appeal to extra vacationers from overseas, whose expenditure will assist defray a few of these public prices.

Some have even claimed that gross sales of memorabilia will increase the general economic system.

Which leaves us with the perennial questions: How a lot cash will we spend on the British monarchy? How a lot of an asset is it to the economic system? Is the Royal Household actually “value it”?

How a lot does the Royal Household price the taxpayer?

Direct funding to satisfy the monarchy’s official expenditure is now by means of one thing referred to as the “Sovereign Grant”.

This changed the previous Civil Checklist and grants-in-aid from authorities departments in 2012 and is meant to be reviewed each 5 years.

In 2016-17 the Sovereign Grant was £42.8m, rising to £76m in 2017-18, with the rise distinction earmarked for refurbishing Buckingham Palace.

Royalists typically level out that these prices symbolize solely round £1 a yr to each individual within the UK.

Nonetheless, this doesn’t embody the safety prices of taking care of the household.

One republican strain group has estimated that these add as much as £100m a yr and assist push the precise annual public price of the monarchy nearer to £350m.

So the royals spend that cash how they need?

No, that’s the funding of their official duties – opening buildings, chairing charities, internet hosting backyard events, travelling the nation and overseas and many others.

The Queen, Prince Charles and different members of the Royal Household have non-public incomes too from their non-public landed estates and monetary belongings.

A sum of cash referred to as “The Privy Purse” goes to the Queen as income from a landed property referred to as the Duchy of Lancaster. This was £19.1m in 2016-17.

Do the royals pay tax?

The Queen has voluntarily paid revenue and capital positive aspects tax since 1992 on her non-public revenue and the revenues not used to finance her official work.

Prince Charles has additionally voluntarily paid revenue tax on his revenue from one other landed property, the Duchy of Cornwall, since 1993.

In 2016-17 that property yielded him income of £22.5m, on which he paid tax of £four.76m.

However the state of affairs is sophisticated.

Nearly all of Prince Charles’ official duties are financed from the Duchy’s revenue. This revenue additionally covers the prices of the official duties of Camilla, William and Kate and Harry.

All this expenditure offsets Charles’ tax legal responsibility. And all of the “working royals” in Charles’ direct household additionally get some revenues from the Sovereign Grant too.

In the meantime, among the Queen’s Privy Purse can also be used to fund her official duties, which suggests she doesn’t pay tax on that aspect of her revenue.

And what monetary advantages do the royals convey?

VisitBritain reckons that tourism linked to royal residences similar to Buckingham Palace and Windsor Citadel provides as much as 2.7 million guests a yr.

And a consultancy referred to as Model Finance estimated in 2017 that the monarchy’s annual contribution to the UK economic system to be round £1.8bn a yr, drawing in a further £550m of tourism revenues a yr, and a rise in commerce, from the Royal Household performing as ambassadors, supposedly value £150m a yr.

That may sound spectacular – and it’s definitely greater than the upper estimates of the Royal Household’s prices to the general public purse – but it surely’s necessary to place these numbers in context.

Abroad guests are estimated to have spent £22.5bn within the UK in 2016. And whole UK exports summed to £543bn. Seen from that perspective, the extra royal-related revenues begin to look considerably trivial.

Furthermore, we must always deal with even estimates of financial exercise linked to the royals with a big sprint of scepticism.

The one solution to attain these numbers is to estimate the counterfactual – what would have occurred to UK tourism or commerce if the Royal Household didn’t exist? Or if the official Royal Household was considerably smaller and cheaper to run?

That’s not simply achieved. Would foreigners actually be much less more likely to go to the UK’s historic palaces in the event that they had been not lived in, now and again, by the Queen, or Prince Charles? 

Would the monarchy be much less of a vacationer draw if the likes of lesser working royals similar to Princess Alexandra and the Duchess of Kent had been not funded by the Sovereign Grant?

The financial increase from visits and festivities associated to royal celebrations ought to definitely be handled with warning given these can displace financial exercise in addition to create it.

This appears to have occurred round Prince William’s marriage ceremony in 2011, when many UK residents seem to have left the nation. 

Royalists may make the historic argument that the monarchy brings political stability to the UK, which has a excessive worth to the economic system. However, once more, that is tough to place a worth on. Particularly when the suitable counterfactual shouldn’t be anarchy, however a secure republic like France or Germany.

Ultimately, the query of whether or not the Royal Household is value it, or not, might be much less a monetary query than a political, ethical and aesthetic one.

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