Sovereign Grant
Dan Tomlinson Excerpts(1 week ago)
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The Exchequer Secretary to the Treasury (Dan Tomlinson)
I beg to move,
That—
(1) provision be made amending the Sovereign Grant Act 2011—
(a) to specify the amount of the Sovereign Grant for the financial year 2027-28;
(b) to specify the percentage of the income account net surplus of the Crown Estate to be used by the Royal Trustees to determine the amount of the Sovereign Grant in subsequent financial years;
(c) to confer a duty and a power on the Treasury to specify the amount of the Sovereign Grant in subsequent financial years in certain circumstances; and
(d) for connected purposes;
(2) any increase attributable to such provision in the sums payable under that Act should be payable out of money provided by Parliament.
The motion stands in the name of the Chancellor of the Exchequer. If we approve it, the Bill to establish the sovereign grant will be published later today, and I am sure the House will have an opportunity for a longer and more detailed debate on Second Reading. The sovereign grant is the annual funding provided to support the sovereign’s official duties and the work of the royal household, including staffing, official travel and the maintenance of the occupied royal palaces.
Since 2012, the level of the grant has been determined through a statutory framework that links it to a specified percentage of the revenue of the Crown Estate—an independent public business whose net revenue profits are returned to the Exchequer. Additionally, in 2016, the previous Government agreed a temporary £369 million uplift to the grant over 10 years from 2017-18 to 2026-27 specifically to fund the Buckingham Palace reservicing programme, a major 10-year project to modernise and safeguard the palace’s essential infrastructure.
Periodically, Parliament requires the royal trustees to review whether the arrangements for the sovereign grant remain appropriate. Earlier this year, the then royal trustees completed that review and made recommendations for the appropriate level of sovereign grant funding from 2027 to 2032. The trustees recognise that with the Buckingham Palace reservicing programme nearing completion, the exceptional funding requirement for the scheme no longer exists. They therefore recommended that the overall level of funding provided through the sovereign grant should reduce from next year from £137.9 million to £99.9 million in 2027-28.
The recommendation was made based on an assessment of the royal household’s expected costs and the Crown Estate’s expected revenues between 2027 and 2032. The new level of the grant will ensure that the royal household can continue to deal with property maintenance backlogs, following some years of constrained funding during the pandemic. It will also allow the royal household to replace ageing systems to strengthen cyber-security and install energy-efficient heating systems.
With the consent of the House, given that we will debate the clauses in the Bill in more detail on Second Reading later this month, I will bring my remarks to a close. Overall, these measures ensure that the grant will continue to fulfil its core purpose of supporting the official duties of the monarch and maintaining the occupied royal palaces. I hope the House will agree that the clauses in the Bill will improve the existing framework governing the sovereign grant so that it continues to operate just as Parliament intended.
Dan Tomlinson
I thank Members from across the House for their questions and for beginning the scrutiny that will take place, should the House agree that the Bill should be laid and for debate to proceed at Second Reading. Let me turn to some of the points that were raised.
The shadow Exchequer Secretary, hon. Member for North West Norfolk (James Wild)—I hope he still has that title, given the Opposition’s ongoing junior ministerial reshuffle—raised a whole range of important questions and asked whether I would write to him on these matters. I would be very happy to write to him, and I am sure the letter can be made available to others in this place, given that a whole range of questions were asked and I may not be able to cover them all in concluding.
One key question asked by Members on all sides was on the increase in the value of the sovereign grant above inflation. That is, of course, an important question, and one that the trustees went over in detail in making the decision to increase the grant, relative to the pre-Buckingham Palace servicing costs, up to £99.9 million. It is reducing by a quarter from the current year to next year because of the Buckingham Palace refit finishing. A large part of the increase in expenditure has been on the refurbishment and the servicing costs of the occupied royal palaces. That was at £18 million in 2016-17 and next year it will be at £33.6 million. That accounts for a large share of the above-inflation increase.
The shadow Minister mentions—the House of Commons Library and others have also pointed to these—other increases in expenditure faced by the royal household: yes, on buildings and maintenance, but also on ensuring the palaces can take proactive steps to improve the energy efficiency of their heating in line with broader net zero goals that have at least some level of consensus across the House. I hope that one day we may be able to rebuild that consensus, which seems sadly to have been lost in recent months, on ensuring that we, along with our international allies, can reduce our domestic carbon emissions. There is the need for investment in cyber-security, which is growing in line with AI, and we must target other long-term measures to make sure the royal household is more resilient.
There was a whole range of questions on whether the trustees have ensured a focus on external benchmarking and on what work has been done to scrutinise the costs. I am assured that that work has taken place, and we can discuss it in more detail on Second Reading. That touches on the point raised by my hon. Friend the Member for Poole (Neil Duncan-Jordan) and others about the fact that the sovereign grant will now be set at close to 20% of the revenue of the Crown Estate, rather than 12.5%. That reflects the bottom-up assessment that has taken place, looking across the needs of the royal household and making sure it is being funded adequately for the public duties that His Majesty the King and the royal family carry out.
It is worth pointing out that those activities have increased significantly in recent years. Towards the end of her reign, the late Queen was not carrying out a large number of foreign engagements and was also hosting a smaller number of state visits. The King has increased the engagement he is carrying out on our behalf as part of his public duties. That has involved more expenditure in staff costs and to ensure that those engagements and the benefits the shadow Exchequer Secretary talked about—the representation of our country and supporting good causes here in the UK—can get the funding and support they need.
It is worth noting, in response to the question raised by the hon. Member for Hazel Grove (Lisa Smart), the Liberal Democrat spokesperson, that the sovereign grant is very clearly focused on the official duties that the royal family carry out on our behalf. It is not about supporting or funding their private activities, or things it would not be appropriate for the sovereign grant to fund.
My hon. Friend the Member for Poole raised the need for debate on these topics. We will get plenty of time on Second Reading to debate the issues that he and others have raised on transparency and clarity on where the sovereign grant is being spent. I have set out today some initial outlines. I will respond in writing and I am sure we will have a thorough debate later in the month.
I will have to get back to the shadow Exchequer Secretary on the business case thresholds, but the Treasury does of course make sure that every penny of our money is well spent, and that includes the £99.9 million that will be allocated.
I have, I hope, responded to many of the points that have been raised. I thank Members for their contributions. I look forward, if we proceed, to debating this matter on Second Reading.
Question put and agreed to.
Ordered,
That a Bill be brought in on the foregoing Resolution;
That the Chairman of Ways and Means, the Prime Minister, the Chancellor of the Exchequer, Secretary Alex Norris and Dan Tomlinson bring in the Bill.
Sovereign Grant Bill
Presentation and First Reading
Dan Tomlinson accordingly presented a Bill to specify the amount of the Sovereign Grant for the financial year 2027-28 and the percentage of the income account net surplus of the Crown Estate to be used by the Royal Trustees to determine the amount of the Sovereign Grant in subsequent financial years; to confer a duty and a power on the Treasury to specify the amount of the Sovereign Grant in subsequent financial years in certain circumstances; and for connected purposes.
Bill read the First time; to be read a Second time tomorrow, and to be printed (Bill 137) with explanatory notes (Bill 137-EN).
Oral Answers to Questions
Dan Tomlinson Excerpts(1 year, 4 months ago)
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The Prime Minister
I extend my congratulations to the hon. Member’s daughters for running the marathon. The Government retain the right to strike trade deals to deliver growth, jobs and opportunities for working people. We clearly set that out in our manifesto, and that is exactly what we are doing. As he knows, Parliament has a well-established role in scrutinising and ratifying trade deals, and as he references, that was strengthened under the last Labour Government.
Dan Tomlinson (Chipping Barnet) (Lab)
Mr Speaker
Order. There is no need to answer that, Prime Minister; you have no responsibility for any of that.