A Royal Sum of Money

For many, they are the antithesis to what a democratic society believes in. Atop a class structure that restrains social mobility, institutes privilege and is guided by tradition; they act as a cultural dead-weight to a modern Britain. Blemished in the eyes of the public by an acrimonious precedent of divorce as well as by an endless retinue of ‘hangers on’, they cost the taxpayer moreover, the princely sum of £40 million per year. However as Britain rejoiced in the wedding of Prince William and Kate Middleton on April 29th – visible in its street parties, bunting, and extensive media coverage – they too encapsulate something distinctly British, with all the essence of national treasure. In an age of perhaps royalist revival therefore, what contribution does the Royal Family make to society and, are they more philanthropic than one likes to think?

In conducting a profit and loss account of the monarchy, one should start with the Crown Estate. Comprised of shareholdings, personal jewellery and property; its asset portfolio is dispersed throughout the duchies and castles of the United Kingdom. It lets land and property through over 12,000 tenancies in the UK and with total capital valued at £6.6 billion, the Royal Family comes to earn considerable rents on its investments. Its current arrangement however derives from a curious commitment carried out in the eighteenth century by King George III. In order to write off mounting debts, the monarch devolved all the profits of the Crown Estate to parliament in exchange for a fixed annual salary. This present day importance of this has been manifold: over the past ten years, £1.9 billion has been paid by the Royal Family to the Treasury, contributing in turn, £211 million in 2009-10. The Queen received £9.7 million that year accordingly which when added to the sum from reserves made a total of £14.2m. These parliamentary funds finance what is known as the ‘civil list’– an expenses budget for the activities of individuals selected at the discretion of the Sovereign.

The revenue of the extensive Crown Estate makes of course, a significant contribution to the public purse. It has been contested somewhat mistakenly nonetheless that, if this contribution were to be subtracted, the taxpayer would have to make up the difference. This assumes total public spending to be a fixed cost to the government, derived from one big pot then apportioned to various sources – instead of being treated separately. On a transition from a monarchy to a republic therefore, increased taxes would not be the necessary consequence. The positive contribution to the Treasury made by this arrangement, with its further role in creating employment notwithstanding remains evidently valuable.

Tourism is another money spinner – overseas visitors to London spent more than £8.6 billion in 2010. Whilst this figure is not related to the monarchy alone, its allure and credentials in attracting foreign visitors to revel in its pristine, quintessential institutions do account for a substantial proportion. Based on the royal wedding’s coverage alone, many of the attendees and viewers were from overseas. The quaintness of Britain’s most controversial family and its privileged existence; free from revolution that characterised the paths of France, Germany and the U.S.A, further casts it in highly marketable light.

The royal wedding itself has split opinion over its merits as a boon to British growth. The retail researchers, Verdict, placed the potential boost at £620 million, consisting of increased food, drink and merchandise sales, with the latter alone estimated at between £12-18 million. Perhaps more questionable, the real boost to the economy could be the product of a ‘feel good factor’ amongst consumers granted time off work on bank holidays. Others however dispute this, speaking of losses in British productivity emerging from such days off work. On the cost side, the Metropolitan Police Authority, with its forces employed extensively on the day, racked up a large bill of which a concrete value is yet to be determined. However, with the Pope’s four day visit cost around £2 million coupled with police officers’ doubled pay, the figure can be expected to be in the region of £8 million. To compound continued over-expenditure, street cleaning is too said to require £30,000 of taxpayer’s money. These figures, by no means exhaustive, overlook additional costs including that of the reception, Kate’s dress, the cake and countless extras.

Whilst calls for a republic may find some foundation in the monarchy’s financial largesse – exemplified in last month’s extravagant event – their redistributive merits should not be ignored. Though less widely reported, the positive financial contributions of the Royal Family do make a strong case. Finance aside however, their enhancement of our society and addition to the rich variability of our cultural heritage is something no republic could ever achieve.