Sovereign Grant Bill

Ian Davidson Excerpts

Thursday 14th July 2011 Commons Chamber

[Mr Kevan Jones]

rose—

[Mr Ian Davidson (Glasgow South West) (Lab/Co-op)]

rose—

[Mr Osborne]

Let me just answer this point before giving way again.

Although I do not want to speak for the Comptroller and Auditor General or the PAC, I suspect that if they wanted to look at the funding arrangements between the MOD and the royal family, they would be able to do so under the provisions of this Bill.

[Mr Osborne]

Let me give way to the hon. Member for Glasgow South West (Mr Davidson) and then I will answer both hon. Gentlemen’s points.

[Mr Davidson]

The Chancellor mentioned his view that income from the Duchy of Cornwall and the Duchy of Lancaster is private money of the royal family. Surely he recognises that in the previous Parliament the Public Accounts Committee established quite clearly that that is not the case—that this is not the private property of the monarch or her family but a trust established by the nation in order to fund the various members of the royal family. That is different from saying that it is the private property of the royal family themselves.

[Mr Osborne]

I should make it clear that it is an established principle that the income from that property, which is held in trust, is for the private purposes of the royal family.

In response to the hon. Member for North Durham (Mr Jones), I point out that there are of course some areas of royal financing—I will come on to say something about royal protection—where it is very difficult to be public about some of the sums of money involved. The Bill—I hope that we will soon get into the meat of it—is a mechanism for helping to continue the current level of spending. As I say, it is perfectly within the rights of the National Audit Office and the Public Accounts Committee, if they want to, to look at payments from the Ministry of Defence, but that has to be a matter for them.

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[Mr Osborne]

It is understood that there are certain pieces of property, such as Buckingham palace, Windsor castle and the Crown Estate, that belong to the institution of the monarchy, and certain pieces of property and assets that are the private property and assets of the Windsor family. That is a well-established precedent and has been recognised by the House for many decades. Nothing in the Bill changes that.

[Mr Davidson]

Will the Chancellor of the Exchequer give way on that point?

[Mr Osborne]

I will give way on that point and then make some progress on clause 1.

[Mr Davidson]

I am very grateful. The Chancellor is undoubtedly correct that some pieces of property are tied in with the institution of the monarchy, such as Buckingham palace, but the coastline of Scotland and the undersea surface are not intimately connected with the monarchy and have never, as far as I am aware, been visited by the monarchy. In those circumstances, I am not clear why the two categories are being conflated. Surely it would be better, if the Chancellor wants a method that is tied to growth in the economy, if it were simply tied to, say, gross domestic product. If GDP went down the Queen and the monarchy would suffer the same as the rest of us, and if it went up, they would benefit in line with the rest of us. That would be better than tying the fund to a measure that I envisage will make it grow at a far greater rate than the economy as a whole.

[Mr Osborne]

First, I do not want to speak for the Queen, but I think she is quite familiar with the Scottish coastline.

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[Mr Osborne]

I will get back to the hon. Gentleman specifically on that point—I do not have specific information on Marlborough house with me at the moment—but on his broader point, for the first time, we will allow the National Audit Office to crawl over the arrangements that he describes.

I was going to go on to explain that some senior members of the Ministry of Defence and our military live in properties that are rented from the Crown Estate at below the market rate. The properties are within extremely secure zones, and it would not be possible to rent them to virtually anyone else. That arrangement suits the MOD, because it gets properties—not very many—at below the market rate, and equally, it suits the royal estates, in that they can rent out properties that they would not be able to rent out otherwise.

Let me talk about those sums. As I have pointed out, the average over the past five years is £34 million, which is much less than 20 years ago, when it was £49 million. In 2013-14—the first year in which the new sovereign grant mechanism will apply—the level will be determined by the profits in 2011-12, as I said earlier. We do not know precisely what those profits will be, because we are in the middle of the financial year, but the recently published Crown Estate annual report for last year showed profits of £231 million, and the Crown Estate confirms that that is pretty much what it is expecting in profits for 2011-12. The result of all that—this is the key point for the House—is that the sovereign grant in 2013-14 would be £34 million, which is in line with the average for the past five years. I would not say that that is a coincidence, because we have partly designed the mechanism to ensure that that has happened.

If projections for the Crown Estate are correct over the rest of this Parliament, we should see a real-terms cut of up to 9% in the funding for the official duties of the sovereign in that period.

[Mr Davidson]

The Chancellor will be aware, from discussions on the Scotland Bill, of a proposal for part of the Crown Estate to be devolved to the Scottish Parliament in Edinburgh, or handed to local authorities, community groups and so on. What would happen to the Crown Estate and the money going to the royalty if that proposal were passed?

[Mr Osborne]

That is not something that the Government are proposing today. If we were to propose it, we would of course address the impact of such a decision on the royal finances. I am assuming that even under such arrangements, the Queen would remain the Queen of Scots. I believe that most of us are happy with the current arrangements.

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[Mr Leigh]

We live in such a public world now that the Prime Minister took Ryanair when he went on holiday.

[Mr Davidson]

I am grateful to the former Chairman of the Public Accounts Committee for giving way, and I have to tell my colleagues that he is not nearly as bad a man as he often appears. Does he accept that there is a difference between what the royal family undertake as their public duties, which should, quite rightly, be examined by the Independent Parliamentary Standards Authority or a similar organisation, and what they undertake in their private lives, which should not be accessible to the public? Does he accept that extravagances in their private lives should not be charged to the public purse? That really is the difference. Like the hon. Gentleman, I recognise that we do not wish to intrude into every element of that family’s life; but if they do not want us to intrude, they should not charge such things to the public.

[Mr Leigh]

I am not sure whether the Queen or the Prince of Wales charges “extravagant” aspects of their private lives to the public purse, but what worries me is that if Prince Charles went on an official trip to America and took so many hairdressers, butlers, private secretaries and all the rest, the media and the hon. Gentleman, if he was still a member of the PAC, would immediately demand a public inquiry, and there would be a gradual drip, drip of attacks in the tabloid press against the royal family. We should be aware of that and warn about it. That is why the role of the Comptroller and Auditor General is absolutely crucial; he is not a politician. The reason I am making these remarks—if he reads Hansard—is that he must stand firm and make an overall judgment.

[Mr Davidson]

I can assure the House that, when I have travelled abroad, I have certainly never taken a hairdresser with me.

The sort of rules that apply to the Prime Minister ought to apply to the royal family in this context. The Prime Minister and senior members of the Government must have a certain degree of support and status when they travel abroad on parliamentary and official business. The royals similarly ought to have some status when they travel abroad. However, the two ought to be comparable. To be fair, the Prime Minister has never taken hairdressers, butlers, valets, chauffeurs or anything similar with him.

[Mr Leigh]

This debate is useful in a way, because it shows precisely the problem. I understand that the Duke and Duchess of Cambridge have taken extremely modest entourages and staff on previous trips. Apparently, the Duchess has had more than 37 different changes of outfit in America and Canada. I do not suppose that the Prime Minister or even the hon. Gentleman changes his outfit 37 times when he goes on Select Committee trips abroad. There is a completely different order of scale between a Head of State, who is part of the ornamental part of the constitution and who represents our country, and even the Prime Minister. If we are now to have questions and relentless pressure in the PAC about how many dresses need to be taken on every royal trip, it will be ridiculous, and it would start to make the royal family look more and more ridiculous. That is what I am warning against.

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[Jacob Rees-Mogg]

I remember the secret treaty of Dover well, although I was not an active participant. However, it is not particularly relevant to this debate. It has to be borne in mind that Louis XIV did not deliver the cash, which is always a slight problem in such negotiations.

The Crown Estate belongs to the sovereign. Any other great landowner who has inherited land owns that property outright and is free to pass it from generation to generation. The Crown Estate is in that position. We have discussed before whether, because it is exempt from death duties or because it used to be used to pay for Government expenditure, it is in some sense different and the nation’s. I would argue that that reasoning is not accurate. In the same way that the feudal duties that fell upon other landowners were abolished as time went on, so the Crown Estate would in all normal circumstances have become the Queen’s outright.

I therefore go back to my point, which the hon. Member for Newport West (Paul Flynn) dislikes, that the Queen pays an 85% tax rate. There would be £200 million or more in income for the Queen every year, but in fact there will be only about £30 million. So Her Majesty is the highest-paying taxpayer in this country. Members of Parliament might like to think that we could do a deal with the Government, hand over our salary and be given £9,000 a year back.

[Mr Davidson]

Does the hon. Gentleman recognise that there is a distinction between the monarch as an individual and the monarchy as an institution? The Crown Estate is the property of the state, inasmuch as it is the property of the monarchy as an institution, not the monarch as an individual. It is therefore untrue to say that the monarch as an individual is paying 85% tax.

[Jacob Rees-Mogg]

I am very grateful to the hon. Gentleman, but I think it is immeasurably confusing when we start trying to divide the Queen up in that way. Her Majesty is our sovereign, full stop. She is one person, indivisible. She is not the trinity—Her Majesty the Queen, Her Majesty Mrs Windsor and Her Majesty the third party of the trinity. It does not work like that. She is one sovereign individual.

The next point that I want to make is one on which I agree, as I often do, actually, with the right hon. Member for North Durham. [Hon. Members: “Honourable.”] I am so sorry, the hon. Member for North Durham (Mr Jones). It is in Her Majesty’s gift, of course, to promote him, and perhaps she might have looked more favourably on that if he had been a bit more loyal in his comments. However, I agree with his point that we have to pay for the constitution that we have. The Queen is not here to bring in tourism and things like that. She is here as an essential part of our constitution. That is why it is worth the military taking on the costs of sending attachés and so on and so forth. The military owe their loyalty to the Crown, not to politicians, senior generals or people who could abuse that power to change how this country is run.

Our constitutional settlement, which works extraordinarily well and has worked well for hundreds of years, is worth paying for. On that basis, we get stability as a nation and the effective operation of our constitutional system. The judges owe loyalty to the Crown; the military owe loyalty to the Crown; we, as Members of Parliament, swear an oath to the Crown. It is the Crown that is at the pinnacle of our constitution, outside and above politics and a defender of our liberties. Indeed, as Charles I said at the scaffold, he died the martyr of the people, because he had been defending the liberties of the people, as the Queen has done now for jolly nearly 60 years. We must be willing to pay the right price for our constitutional settlement, and I think that should be a generous price.

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[The First Deputy Chairman of Ways and Means (Mr Nigel Evans)]

Follow that, Mr Davidson!

[Mr Davidson]

It is difficult to follow a speech like that because in many ways, it took the biscuit.

[Chris Ruane]

Bourbon!

[Mr Davidson]

Of course, as my hon. Friend says, that biscuit would be a Bourbon.

It is worth while clarifying the question of the ownership of the Crown Estate. Is it owned by the monarch as an individual or the monarchy as an institution? When the Public Accounts Committee looked at this matter, there was a consistent attempt by officers of the monarchy to confuse and conflate the two. We need to ask ourselves this question: were the monarchy abolished, would Crown Estate moneys and properties belong to the deposed monarch as an individual or would they remain with the state? It is quite clear that they would remain with the state. Therefore, the moneys and the estates are not the property of the individual who happens to be the monarch at any particular time. That clarifies a number of things.

[Mel Stride (Central Devon) (Con)]

Will the hon. Gentleman give way?

[Mr Davidson]

No, I want to proceed because we are short of time.

I am seeking clarification from the Chancellor, who, I remember, was on the Public Accounts Committee when he was a young whippersnapper—I have often wondered what happened to him since. Will the National Audit Office, the interventions of which I will welcome, also be able to look at all elements of royal involvement? In particular, can it look at the royal art collection, about which there were serious discussions and disputes in the past? That would seem to be covered by what he has said, but it is not immediately clear.

Is the Crown Estate the right body to take into account when determining the monarch’s income? Those of us on the Public Accounts Committee who examined the Duchy of Cornwall’s accounts were absolutely clear that the Duke of Cornwall was manipulating the money involved, by playing a major role in determining the amounts of expenditure and income, thereby determining how much money came, or was available, to him as an individual.

Quite clearly, the Crown Estate could be leant on by the monarchy to make decisions on expenditure and income in the short term to affect the amount of grant that the royal family receive. The grant would then be on, as it were, a golden ratchet—a bit like EU expenditure, it would always go up, and never down. There is clearly scope for abuse in those circumstances. Will the Chancellor clarify those points?

Will the Chancellor also take into account the fact that there is due to be a windfall from wind and wave power? Will he assure the Committee that all of that will be taken into account when the review takes place in due course?

[Mr George Osborne]

I shall deal briefly—because time is short—with the points raised. I should say first, however, that I am grateful to the Committee and the Opposition Front-Bench team for the general support they have given to clause 1 and indeed the whole Bill.

My hon. Friend the Member for Gainsborough (Mr Leigh) raised the key question: how do we create a mechanism that preserves the dignity of the monarchy while ensuring that the House is accountable for the expenditure of public money? As I said in my opening remarks, there is the question of whether the money provided is enough or too much. I said that we do not want a cut-price monarch or a lavish monarchy. As a general guide, I have looked at how much the monarchy has spent over the past five years. On average, £34 million of public money has been given per year through various forms of grant and money drawn from a reserve built up using public money. I have said that that is not a bad guide for the future and that 15% of Crown Estate revenue will provide that amount over the rest of the Parliament. In 2016, we will review whether that is the right amount.

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[Tristram Hunt]

In Committee, the hon. Member for Gainsborough (Mr Leigh) said that the monarchy was a fragile institution, but I beg to differ. The monarchy has shown itself to be a very powerful and strong institution, lasting over the centuries. If the British state was beginning again, we probably would not start by creating a monarchy: it is irrational, inequitable, inherently sexist, myopic and averse to many of the principles of progressive politics and the social democratic future that we on the left hold dear. However, we are where we are and there is no enthusiasm for dismantling the monarchy.

[Mr Davidson]

Yes, there is.

[Tristram Hunt]

Among the public as a whole.

We in opposition should be brave and confident enough to think about some of the monarchy’s strengths, which is partly what the Bill is about ensuring. First, the monarchy gives a broader notion of citizenship. We on the left often get in a lather about being subjects rather than citizens and whether that holds back our politics, but the virtue of the monarchy is that it creates a notion of citizenship that is not necessarily linked to ethnicity. It is not a blood-and-soil notion of citizenship. The political scientist John Gray put it rather well when he wrote:

“The monarchical constitution we have today—a mix of antique survivals and postmodern soap opera—may be absurd, but it enables a diverse society to rub along without too much friction.”

It also points to a wonderful thing about Britain—that we have no purpose in the world, unlike the great republics of France, America or Italy, where there is an endpoint, or telos, to do with happiness or improving equality. Britain has no ultimate endpoint and monarchy is part of that.