Analysis by Phillip Hall

The Chancellor, George Osborne, sounded tetchy. As part of his Comprehensive Spending Review, he outlined a new method of funding the Monarchy. He told the Commons it would mean ‘that my successors do not have to return to this issue as often as I have had to’.

Reading between the lines, it appears that Mr Osborne has already been on the receiving end of considerable Palace pressure during the five months he has been in the job. He sounded relieved to be freeing himself from it.

Instead of Parliament granting an annual fixed income for the Civil List, in three years’ time the Queen will receive ‘a new Sovereign Support Grant, linked to a portion of the revenue of the Crown Estate’.

Signed up: The Queen, pictured on a visit to Ulster, will see the rewards of a new method of funding the Royals

But in agreeing to this, Mr Osborne has ceded an important principle. Having to justify State expenditure on the Monarchy to the Commons might have been irritating to Chancellors and Royalty, but it is an essential part of our constitution.

The Palace has been pushing for income from the Crown Properties since the end of the 19th Century. The Palace can immediately claim that by being paid from the Crown Estate, the Royal Family really costs the taxpayer nothing.

But Mr Osborne’s proposals seem to be an automatic means of guaranteeing annual increases in funding at least in line with inflation and maybe much more.

New legislation would have to be brought in for the Sovereignty Support Grant but that would be the last time Parliament would debate how much the Monarch is to receive in guaranteed income, a right which it has maintained (albeit under pressure) since 1760.

That was when George III surrendered the Crown Estate – lands acquired by William the Conquerer and Henry VIII – to the Government in exchange for a fixed income from the Civil List. In truth, by the 18th Century, the Crown Estate was controlled by Ministers who rented the land to MPs for tiny sums to bribe them to vote with the Government.

So the Crown Estate was never the Monarch’s ‘private possession’ as such.

Yet there are still those who talk of the good deal the taxpayer gets from the Monarch having given up the now sizeable Crown Estate income. And that’s where the Palace thinks it has lost out.

Pat on the back: But George Osborne's new deal could cost politicians in the future

The Crown Estate today is valued at £6.6 billion and includes prime streets such as Pall Mall and Regent Street in London. It has 265,000 acres of farm land, it owns quarries, forests and parkland.

Last year, the Estate handed over £211 million to the Treasury and 15 per cent of that would be handed over to the Palace.

On current figures, this would yield much the same as the £33.3 million Civil List. The Treasury say that in future years, this sum could be adjusted if it became too large or too small.

The Crown Estate also owns all the seabed out to 12 nautical miles. And from 2015, wind farms are likely to generate up to £250 million a year for the Estate.

The proposed new arrangements are a surprise turnabout for the Treasury. Previous senior civil servants there had always resisted any claims by the Royals to the revenues of the Crown Estate.

Burke Trend, a Treasury official who went on to be Cabinet Secretary, wrote a memo to the 1952 Chancellor, Rab Butler stating it was ‘a historical fallacy to suppose there is anything in
the nature of a bargain between the Crown and Parliament whereby the Crown surrenders hereditary revenues, in return for a fixed Civil List’.

But it seems George Osborne has accepted many false arguments about the historic relationship between the Monarch and the Crown Estate and ignored the long-held opinion of his own department.

The National Audit Office will be able to audit royal expenditure, but Parliament will no longer be able to debate and determine financial support to the Monarchy.

The purpose of a Civil List was to bring the Monarchy under Parliamentary control. As long as the Monarch depends financially on Parliament, they can be brought to heel if they try to interfere, unconstitutionally, in political debate.

A large and inflation-proofed stream of revenue from the Crown Estate removes that constraint. The Queen has resolutely resisted the temptation to meddle.

Her son, with his fondness for memos to Ministers, shows no such restraint. Future politicians may bitterly regret the concession made by George Osborne last week.

Comments (421)

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What utter codswallop, she does NOT own the seabed, NOBODY does...................

- Hadenuff, Kent, 24/10/2010 20:35

Oh right......... well thanks for clearing that up then, I guess all those solicitors can just ignore the statute books that say the crown (The Queen) does!

- shaun, london, 25/10/2010 10:37

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The only way that the lands under the sea were taken up by so-called royalty was with force of arms. They never did anything to own a bucketful of sand in an honest way.

How much longer are these parasites going to be allowed to exploit what belongs to the british people?

- Dynamax, UK, 25/10/2010 09:59

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Who the hell do these criminals think they are, they do not own the sea or the land, it belongs to all. These criminals and child sacrificers called the Windsors need to be arrested and imprisoned for eternity for the misery and suffering they have caused on Planet Earth, it seems these monsters want to destroy the entire Planet with their filth.

- Arthur Guy, Gloucester, England, 25/10/2010 09:46

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Given a choice between mosques and windmills as a 'horrible blot on the (uk) landscape' I think many people would settle for keeping the windmills, I hope the Prince takes this into consideration when visiting with his Saudi buddies with their oil producing interests, some who apparently consider him a bit of a hero for one reason or another.

- leew, Lancashire, 25/10/2010 05:52

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Fraud and Error in social security benefits is estimated to cost about £68.3 million per annum, far more than is paid to the QUeen.

Get rid of the leaches on the dole before getting rid of someone who actually contributes to society.

Now a little history lesson for the whingers:

After George III's accession to the throne in 1760 the cost of the Civil List was paid by Parliament in return for the monarch surrendering his hereditary revenues from the Crown Estate to Parliament for the duration of his reign.

On the accession of William IV in 1830, the sum voted to the Civil List was restricted to the personal expenses of the crown, removing any residual responsibilities associated with the cost of the civil government.

So particularly @ Ken in Ayrshire - the seabed is "a national asset" and all monies made from it do "benefit everyone in this country" however a deal is a deal, we can't keep all of the Crown Estate revenue and not pay out on the Civil List.

- Steve, UK, 25/10/2010 03:15

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Oh that poor woman, you'd better pay her heating bill for her!

Read more: http://www.dailymail.co.uk/news/article-1323228/Queens-38m-year-offshore-windfarm-windfall--owns-seabed.html#ixzz13NdIgsHv

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