Sovereign Grant Bill

Bobby Dean Excerpts

Committee of the whole House & 3rd reading
Monday 14th September 2026 Commons Chamber

[The Second Deputy Chairman of Ways and Means (Caroline Nokes)]

I call the Liberal Democrat spokesperson.

[Bobby Dean (Carshalton and Wallington) (LD)]

The Liberal Democrats support the thrust of the Bill. We understand why the royal household budget has increased and agree that it is right for the grant to be reset now that the Buckingham Palace programme has finished. However, we remain concerned about transparency and have put forward an amendment to that effect.

Our amendment would insert a new subsection that would stop the royal trustees proposing any future increase to the percentage of Crown Estate profit used in the grant formula unless three conditions are met first. The National Audit Office must be commissioned to carry out a value-for-money assessment of the proposed change; that NAO report must be laid before both Houses; and finally, the House of Commons must debate and approve the change by resolution.

This contrasts with the Bill as drafted, which sets the figures straight into primary legislation on the strength of the royal trustees’ own conclusions, with no separate independent check built in for the next time that the percentage is revisited. That matters because it is the royal trustees who produce that report—the Prime Minister, the Chancellor and the Keeper of the Privy Purse. In other words, the people proposing the change are marking their own homework, with no independent body or vote required to test whether it represents good value for the taxpayer.

Our amendment is not about opposing the grant or blocking today’s readjustment, which the Liberal Democrats accept is right now that the reservicing works are complete. Instead, it is about ensuring that if a percentage increase is proposed again in the future, taxpayers get an independent, NAO-assessed value-for-money check, with their elected representatives getting an actual vote on it, rather than the change simply following through the trustees’ own formula.

To conclude, the Liberal Democrats believe that greater transparency and independent scrutiny of taxpayer money must be built into the system for the future, not treated as optional, and that that is best guaranteed by external checks, not simply taking the Government’s word for it.

[Dan Tomlinson]

I thank the Opposition spokespeople for their questions and comments.

Turning first to the questions from the spokesperson for the official Opposition, the OBR forecasts for inflation, interest rates and so on were used as the underlying basis for the projections. To the extent that Members across the House support the OBR and its independent forecasting duties, I hope that they would support the royal household using those forecasts.

On the hon. Gentleman’s point about the reserve, the household previously aimed to maintain reserves of at least 5% of annual expenditure. This legislation formalises a slightly higher reserve at 10% as the floor, with 50% being the ceiling. It is our judgment that that is reasonable. Of course, 50% is a significant reserve.

The hon. Gentleman asked what happens to the reserve. Of course, it can be drawn down on in times when the royal household faces significant in-year financial costs. The first reaction of the Treasury and the royal trustees would not be to come to the House to ask for a vote to increase the expenditure in the case of additional in-year costs. Instead, it would be hoped that capital programmes could be smoothed out over time, and that the flexibility allowed by the reserve could be drawn on.

The hon. Gentleman asked specifically whether the secondary legislation in the event of changes would be subject to the affirmative or negative procedure in the House. I can confirm that if the percentage were to go up, it would be subject to the affirmative procedure, and we would therefore have the option to debate and discuss. If the percentage were to go down, my understanding is that it would be subject to the negative procedure.

I am grateful to the Liberal Democrat spokesperson for raising the important issues of transparency, accountability and value for money. However, it is the Government’s view that the Liberal Democrat amendment is not necessary under the existing framework. Any future proposal to increase the percentage used to calculate the sovereign grant would already require a published report from the trustees setting out the rationale and, as I have just said, would require the approval of the Commons through the statutory instrument being subject to the affirmative procedure, so Members of the House would have the opportunity to analyse and debate any proposed change.

The National Audit Office already plays an important role in scrutinising the sovereign grant. It audits the grant annually and can undertake value-for-money examinations where it considers that such work would assist Parliament. Indeed, it exercised these powers, as we have discussed, in relation to the Buckingham Palace reservicing programme.

The Liberal Democrat amendment would also create a unique test that is not applied to other bodies funded by the public sector. It is the Government’s view that the sovereign grant is already subject to robust arrangements for accountability and scrutiny, including the managing public money principles, accounting officer oversight, National Audit Office audit and parliamentary approval for legislative changes.

Question put and agreed to.

Clause 1 accordingly ordered to stand part of the Bill.

Clauses 2 to 4 ordered to stand part of the Bill.

The Deputy Speaker resumed the Chair.

Bill reported, without amendment.

Bill, not amended in the Committee, considered.

Third Reading

--- Later in debate ---

[Bobby Dean]

I thank the Minister for his comments on the Liberal Democrat amendment that was discussed earlier, and we recognise the arguments that he made in response. I support the Bill.

Question put and agreed to.

Bill accordingly read the Third time and passed.