Civil List

Justine Greening Excerpts

Thursday 30th June 2011 Commons Chamber

[The Economic Secretary to the Treasury (Justine Greening)]

The last time that the House substantively debated this issue was during proceedings on what became the Civil List Act 1972, and, as the system that the Act implemented comes up for renewal, it is only right that we debate its merits and potential for reform.

I am grateful to right hon. and hon. Members for, in particular, a lively and informative debate about reforming the sovereign grant. As we heard from my hon. Friends the Members for Brentford and Isleworth (Mary Macleod) and for Northampton North (Michael Ellis), the royal family contributes a tremendous amount to our country, and they paid fitting tributes to its work on behalf of the nation. We also heard from other Members their thoughts about the royal family and how they should be funded in future.

Of course, the last time we had such a debate was back in 1972. I have not yet had time to read that debate; I am not sure whether it would have been as entertaining as the one we have had today. We heard suggestions about whether we should have a biking monarchy. I am sure that Members will be interested to know that the Duke and Duchess of Cambridge were given a tandem Boris bike by the Mayor of London; I am sure that they will use it frequently.

As my right hon. Friend the Chancellor said, we believe that the system is in need of change. I greatly appreciate the support of the shadow Chancellor, the right hon. Member for Barking (Margaret Hodge) and my hon. Friend the Member for Gainsborough (Mr Leigh) for the measures that we are bringing forward. We want to reform the system so that we can put the grant funding on a sustainable, long-term footing and, as we have said, open it up to full parliamentary scrutiny. I think the colleagues I mentioned appreciate the objectives that we have in mind. In addition, we want to take the opportunity to modernise and simplify some peripheral elements of the current legislation.

As the Chancellor set out, we have been guided by three principles: first, ensuring that we have sustainable, long-term financing for the royal household, free from annual political interference; secondly, ensuring that it has some flexibility so that the royal household can manage its finances efficiently; and thirdly, ensuring accountability by establishing proper checks and balances to prevent sums from becoming excessive. Following those principles, we have arrived at the proposals that we are debating—initially, although we will have a Second Reading debate shortly—for a new sovereign grant.

These are genuinely significant reforms that are designed to last. Linking the sovereign grant to Crown Estate profits means that arrangements will be durable where the old system was not. As we have heard, 15% of Crown Estate profits is the starting point for deriving the grant amount. It will be based on 15% of profit in the year two years prior—so, for example, the grant for 2013-14 will be 15% of the profit for 2011-12. That will provide an amount that should keep royal spending broadly in line with spending in recent years in real terms. The percentage will be reviewed every seven years. In the unlikely event that an increase is proposed, it will require affirmative resolution in Parliament; and, of course, there are powerful control mechanisms that ensure that the grant never becomes unmanageable.

Furthermore, the Bill brings accountability arrangements for the royal household into line with those for other Government Departments. We think it is important that Parliament should have the ability to scrutinise the expenditure when it sees a need to do so—

[Mr Kevan Jones]

If a large surplus builds up in the seven-year period, what will happen to it? Will it be retained by the royal household for their use, or will it be paid back to the Treasury?

[Justine Greening]

There will be a cap at 15% of the spend by the royal household in the previous year. If the hon. Gentleman waits for a few more minutes, when I will have a chance to present the Bill to the House, he will have even more information at his disposal to understand exactly how that cap will work, how the review will take place, and who will perform it.

The Bill brings accountability arrangements for the royal household into line with those for other Government Departments. Parliament will have an opportunity to scrutinise that expenditure when it—

[Mr MacShane]

The hon. Lady keeps saying that the royal household will be brought into line with other Government Departments. Does not that imply that there will be a Government Minister who is accountable to the Commons for what the royal household is spending and will, from time to time, answer questions on it?

--- Later in debate ---

[Justine Greening]

The right hon. Gentleman is absolutely right to raise that issue. Of course, the Treasury will be accountable for the sovereign grant.

As for accountability to Parliament, sovereign grant expenditure will be audited annually by the Comptroller and Auditor General and those reports will be laid before Parliament. Should it wish to do so, the Committee of Public Accounts will also be able to scrutinise grant expenditure and will be able to invite the royal household to give evidence. As we heard from the right hon. Member for Barking, her Committee is already looking at how it may wish to fulfil its role in the accountability of the sovereign grant. In fact, that was one of the main things that Parliament argued for before the Civil List Act 1972. It was not implemented at that time, but it is right to do so now.

I very much welcome the valuable contributions of Members on both sides of the House—those of the right hon. Member for Rotherham (Mr MacShane), the hon. Members for North Durham (Mr Jones) and for Newport West (Paul Flynn), and my hon. Friends the Member for Caithness, Sutherland and Easter Ross (John Thurso), for Bristol West (Stephen Williams) and for Cheltenham (Martin Horwood). They set the context for the debate that we will have on Second Reading of the Bill, which I will shortly present. Once that Bill is before the House, Members on both sides of the House will have a better chance of understanding the proposals and how they will impact on the sovereign grant.

As I have said, this is only the first debate. There will be an opportunity to debate the matter in more detail on Second Reading and in Committee, which will be a Committee of the whole House. I am pleased that we have had a good discussion this afternoon, and that there is agreement on a number of fundamental issues.

Her Majesty the Queen has given exemplary service to the country throughout her 60-year reign. She, and other members of the royal family who support her in her official capacity, will continue to play a vital role in representing and promoting the UK and the Commonwealth. I know that my hon. Friend the Member for North East Somerset (Jacob Rees-Mogg) would agree wholeheartedly that it is right to provide the royal household with stable and sufficient support in those duties.

As I have pointed out, the royal household has significantly reduced its expenditure. As the Chancellor said, total spending by the royal household has reduced by almost £10 million over the past two decades. That is a real-terms cut of more than 50% in 20 years, which no other Department can claim to have achieved. It is also right that we ensure that that provision is transparent and accountable. In fact, on current assumptions, we expect the sovereign grant to be between £34 million and £36 million for 2013-14 and 2014-15. Such a level of support is lower than it would have been under the old system. As we have heard, in cash terms, that is broadly in line with the current level of spending, but in real terms, there is a cut of 9% over the course of this Parliament. As I said, that is lower in real terms than royal household expenditure in any of the past 20 years. The cost amounts to 51p per person per year in the UK. That is a remarkably low price to pay for the royal family’s profound contribution to public life.

The sovereign grant Bill will put that funding on an efficient, sustainable footing, and provide for it to be fully accountable to Parliament and the public. These are necessary reforms and I commend the Bill to the House.

Question put and agreed to.

Resolved,

That—

(1) new provision be made for, or in connection with, the financial support of the Sovereign and of the heir to the throne;

(2) any sums payable in respect of provision so made should be payable out of money provided by Parliament;

(3) provision be made enabling the continuation, in the reigns of Her Majesty’s successors, of the payment of the hereditary revenues of the Crown as directed under section 1 of the Civil List Act 1952;

(4) provision be made about allowances and pensions under the Civil List Acts of 1837 and 1952;

(5) any sums payable in respect of such allowances and pensions by virtue of any provision so made should be charged on the Consolidated Fund;

(6) it is expedient to amend the law relating to the financial support of members of the Royal Household.

Ordered, That a Bill be brought in upon the foregoing Resolution;

That the Chairman of Ways and Means, the Prime Minister, the Deputy Prime Minister, Mr Chancellor of the Exchequer, Mr Secretary Clarke, Mr Secretary Hammond, Mr Secretary Hunt, Danny Alexander, Mr Mark Hoban, Mr David Gauke and Justine Greening bring in the Bill.

[The Treasurer of Her Majesty's Household (Mr John Randall)]

The Prince of Wales, having been informed of the subject matter of the Bill so far as it relates to the Duchy of Cornwall, recommends it to the consideration of the House.

Sovereign Grant Bill

Presentation and First Reading

Justine Greening accordingly presented a Bill to make provision for the honour and dignity of the Crown and the Royal Family; make provision about allowances and pensions under the Civil List Acts of 1837 and 1952; and for connected purposes.

Bill read the First time; to be read a Second time tomorrow, and to be printed (Bill 213).