Sovereign Grant Bill

Jim Shannon Excerpts

2nd reading
Monday 14th September 2026 Commons Chamber

[The Parliamentary Secretary to the Treasury (Torsten Bell)]

I beg to move, That the Bill be now read a Second time.

The Bill relates to the sovereign grant that Parliament has provided to support the official duties of the monarch and the work of the royal household. The Bill implements the conclusions of the recent royal trustees’ review of that sovereign grant. In doing so, it resets the grant level for the next financial year, giving effect to the commitment of successive Governments and the expectation of the royal household for a reduction in the level of funding following the completion of the Buckingham Palace reservicing programme, which keen Members will have heard about on the news this morning on the back of the discovery of some historical documents.

The Bill also makes targeted improvements to the statutory framework for this funding, introducing limited flexibilities to ensure that funding levels remain appropriate even in exceptional circumstances. This will make it easier to respond where funding would otherwise become inappropriately low or inappropriately high.

To support the monarch’s official duties, the sovereign grant funds the staff, official travel, property maintenance and essential services for the sovereign to fulfil their unique constitutional role. That role extends beyond ceremonial functions: it includes hosting heads of state, supporting diplomatic engagements, representing the United Kingdom overseas, and strengthening our relationships across the Commonwealth and the world. These activities support the UK’s interests, including trade, investment and security. At home, the grant supports the significant role of the sovereign and the wider royal household, from recognising charitable and voluntary service to bringing communities together across the United Kingdom.

Since 2012, the amount of the sovereign grant has been determined through a statutory framework established by Parliament in the Sovereign Grant Act 2011. That framework requires the annual grant amount to be calculated by reference to the previous year’s expenditure and a percentage of the profits of the Crown Estate—an independent public corporation whose net revenue profits are returned to the Exchequer. To ensure that funding levels remain appropriate, the 2011 Act requires the royal trustees—the Prime Minister, the Chancellor of the Exchequer and the Keeper of the Privy Purse—to conduct regular reviews.

[Jim Shannon (Strangford) (DUP)]

The Minister is setting the scene incredibly well. He is right to underline that the British monarchy has clearly been a source of stability across the world, and to say that its unity remains irreplaceable in a world full of division. We acknowledge the ongoing need to review and adjust the sovereign grant, but does he agree that it is vital that the monarchy remains appropriately funded? When he sums up, can he assure us that the monarchy will be funded to effectively fulfil its duty to this country, the great United Kingdom of Great Britain and Northern Ireland?

--- Later in debate ---

[The Exchequer Secretary to the Treasury (Dan Tomlinson)]

I thank Members on both sides of the House for their contributions to the debate. I thank, in particular, my hon. Friend the Member for Poole (Neil Duncan-Jordan) for his engagement in the ways and means debate. I was glad to be able to write to him and to the Opposition in the intervening days to clarify a few points and, I hope, expand on some of the information that I gave during that debate.

Let me briefly touch on the headlines of the three things that the Bill is doing; I will then deal with the points that have been raised, and will wrap up in good time. First, the Bill resets the level of the sovereign grant to reflect the fact that the exceptional funding requirement associated with the Buckingham Palace reservicing programme is coming to an end. Secondly, it establishes a revised mechanism for calculating the grant in future years. Thirdly, it introduces limited powers to adjust the grant in exceptional circumstances—powers that have already been discussed in our proceedings—including circumstances in which funding would otherwise become inappropriately high. The Government believe that, taken together, these changes amount to a measured and sensible reform.

I now turn to some of the points raised. My hon. Friend the Member for Alloa and Grangemouth (Brian Leishman) made a valuable contribution. I would have enjoyed hearing more of it, but I understand that he had to keep within scope, and I will ensure that I do so too, Madam Deputy Speaker. His final point was that he does not think it is appropriate for this sum of £99.9 million to go to the royal family. It is worth clarifying that this grant is not for the family’s personal purposes, but to enable His Majesty the King and the working members of the royal family to carry out their official duties on behalf of all of us and of the country.

Turning to the Liberal Democrat spokesperson, the hon. Member for Carshalton and Wallington (Bobby Dean), I look forward to debating the proposed amendment in more detail in Committee. I thank the Liberal Democrats and the official Opposition for their support and engagement on the Bill.

If I understood my hon. Friend the Member for Poole correctly, his key question is: why is the grant set relative to the profits from the Crown Estate at 20.5%, rather than the needs of the household? I reassure him that the key thing is the needs of the household, rather than the figure of 20.5%. The way the trustees arrive at the relevant figure is via a bottom-up assessment of what is required to enable the royal household to carry out its duties on our behalf. It starts not with the relevant percentage of the Crown Estate profits, but instead with the specific needs and requirements of the monarchy.

On my hon. Friend’s specific point about the increase in the sovereign grant over recent years, he is right to point out that it is set to increase by more than inflation, but the trustees interrogated a number of reasons for that when the £99.9 million grant was determined. They include, for example, an £11.7 million addition for a 10-year programme to replace the gas heating systems at Buckingham Palace and Windsor Castle as part of the royal household’s clean energy transition; £4.3 million to modernise ageing digital infrastructure and strengthen cyber-security, and replace some legacy IT systems, some of which are over 20 years old; and £11.5 million for other cost increases such as on utilities, travel, housekeeping, equipment and professional services.

I do take and understand my hon. Friend’s point about inflation, but I point out that the grant will in effect be frozen—in cash terms—throughout the next five-year period. That goes to the point made by the right hon. Member for South West Wiltshire (Dr Murrison) about the stability of the royal household’s finances. It also goes some way to explaining why the Government do not think that coming back each year would be the most appropriate and efficient way to set the grant. For those seeking to deliver value for money for the taxpayer, particularly with long-term capital expenditure, via the sovereign grant, it is much easier to do so when it is possible to plan on a long-term basis.

[Jim Shannon]

The royal family have buildings, which are of some age, all over the country, and by their nature there is deterioration due to their size, the heating, the roofs, the way the buildings are and the length of time they have been in existence. Does the Minister agree that, when it comes to the responsibility of the royal family to look after these buildings, further consideration must be given to those that are showing years—maybe hundreds of years—of deterioration?

[Dan Tomlinson]

Yes, I agree with the hon. Member on that point. These grade I listed buildings and scheduled ancient monuments are a very significant part of our national story and, for many, of our national identity. On his point about the quality of the estate, I can tell the House that independent surveys have found that 52% of the estate was at the target condition in 2020, but that had fallen to 38% by 2025.

To conclude, the question before us is a practical one: do we wish to leave in place a framework that no longer properly reflects the end of the exceptional reservicing expenditure on the palace; or do we wish to put in place a revised framework that resets the grant, improves flexibility and preserves the ability of the grant to fulfil its core purpose? The Government’s view is that the right course is the latter. These measures are targeted, proportionate and deliver value for money for taxpayers. They improve the existing framework to the sovereign grant so that it continues to operate, I believe, as Parliament intended. I commend the Bill to the House.

Question put and agreed to.

Bill accordingly read a Second time; to stand committed to a Committee of the whole House (Order, this day).