Royal Family: Civil List

Baroness Jones of Whitchurch Excerpts

Wednesday 10th November 2010 Lords Chamber

[Baroness Jones of Whitchurch]

My Lords, I thank my noble friend Lord Berkeley for tabling this timely debate. He has made some important points on which I look forward to hearing the Minister’s response. As he said, the changes announced by the Chancellor in the CSR could potentially have large financial implications which should be the subject of proper parliamentary scrutiny, notwithstanding the sensitivity of some of the issues raised.

The monarchy and its funding has always been a tricky issue for those on this side of the House—populated, as we have heard, with both ardent monarchists and equally ardent republicans. I hope to tread lightly on this subject. But I am sure that my colleagues, whatever their views on the principle of a monarch in this country, recognise the strong and ongoing public support for the Royal Family in general and for the Queen in particular. She has been a constant in times of turmoil. She is on her 12th Prime Minister and is a constant in the world too. The Queen is widely admired throughout the world, and I have heard it said that she has met more heads of state than any other person, alive or dead, which is quite a feat. In addition, one could argue that the Royal Family provides good value for money for the Civil List. Its attraction in terms of tourism for Britain should not be underestimated, especially as tourism is the fourth largest employment sector in the UK.

I shall move on to the financial structure for the Royal Household, which is the subject of this debate. As we have heard, until now the Crown Estate has managed Crown land on behalf of the Government. Surplus revenue goes to the Treasury in return for which the monarch receives a fixed annual payment—the Civil List. It is an arrangement that has worked well for a number of years and the amount paid has been gradually falling in real terms. But there has been some worrying press coverage of the Chancellor’s recent announcement suggesting that there is some kind of secret deal afoot here. I am sure that that is not the intention or the desire of the Royal Family, and it is therefore vital to defend its reputation by providing further details as soon as possible. So I would be interested to hear from the Minister what pressures the Government came under to change the Civil List arrangements and what the reasons were. In what way was the Civil List system not working? What was the problem the Government were trying to solve when they came up with the new proposals for a sovereign support grant?

Reflecting the public mood on the Royal Family, since 1993 the Queen and the Prince of Wales have paid tax under voluntary arrangements agreed with the Government. Most of their sources of income are now dealt with in accordance with the usual tax rules. This includes activities such as private investments, profit and losses from farming at the royal houses, such as Balmoral and Windsor, and money generated from opening to the public the houses and gardens at Sandringham and Balmoral.

According to the comprehensive spending review document, grant support for the Royal Household will be static in 2011-12 and 2012-13 at £30 million, a further real terms cut. After that the Royal Household will receive the new sovereign support grant linked to the revenue of the Crown Estate. So, in echoing some of the questions that have been raised in the debate, I ask the Minister to give more details of how this will work in practice. There are no further details in the CSR document, or anything on the Royal Family’s website, or on the Crown Estate website.

In particular, the new arrangements in which the sovereign support grant is based on a proportion of the Crown Estate’s turnover could, as we have heard, vary wildly from year to year. How will the Queen budget for expenditure on that basis? Furthermore, in the welcome circumstances of the Crown Estate managing its activities particularly well—my noble friend Lord Berkeley gave an example of how this might work—the Royal Household income could rise significantly from its current position, such that there could be real public concern that the Royal Family was doing rather well while the public were living in a time of greater austerity. I should welcome the Minister’s comments on that possibility. Conversely, if the global economy was to take a serious downward turn, the Royal Household income could, potentially, fall substantially below its current level. What would happen in these circumstances? Would the Government be forced to step in?

It is hard to imagine that the Chancellor’s proposals are as sketchy as has so far been revealed. It would therefore be of great assistance if the Minister could provide details of the background to the agreements made so far, the remaining issues still to be discussed and the process of parliamentary scrutiny to be provided. We could then all be assured that the transparency and accountability developed over the years will still be honoured.