Sovereign Grant Bill

Lord Newby Excerpts

Monday 3rd October 2011 Lords Chamber

[Lord Newby]

My Lords, the briefing circulated in respect of the Bill said that debates in your Lordships’ House on the funding of the Royal Household tended to be brief. When I see the formidable array of experience on all matters royal on the Benches opposite me, I am tempted to be even briefer than I might otherwise have been.

The first question to be raised in any debate on royal finances going into the future is whether the level of funding proposed is broadly in the right ballpark. I suspect that if you told most people in the UK that they were paying, in effect, a penny a week to fund the Royal Household, they would think that they were getting exceptional value for money. It might be virtually the only area where people might almost voluntarily be prepared to pay marginally more. It is a remarkable achievement to run an institution such as the monarchy at a penny a week per head. The fact that the real cost of running the monarchy has fallen by more than 50 per cent over the past 20 years is another remarkable achievement that many other outposts of government would do exceptionally well to emulate. In terms of the quanta and whether the country will believe that the amount of money currently spent on the Royal Household is in the right area, I doubt whether there is more than a very small minority of people who would question that.

My next question is whether this extremely elegant way of funding the Royal Household into the future is likely to be sustainable in the longer term. Given the current incumbent of the monarchy and her heirs and successors, and the extent to which they have been taken to the heart of the nation in various forms, we are looking at an institution which, to the extent that one can predict anything, looks set fair for the next 60 years. Therefore, any long-term funding mechanism has to be capable of being sustained over the long term. The great advantage of the Crown Estate as a method of calculating the income of the Royal Household is that it is a very sustainable long-term operation, and it is easy to see why the Crown Estate will be around in 60 years. That choice of mechanism is very sensible.

The noble Baroness, Lady Royall, raised the question of what happens if the income from the Crown Estate changes beyond what was expected and there seems to be some suggestion that in certain circumstances it could rise significantly. The Bill seeks to deal with that by having a five-year review and a clawback if the sovereign reserve increases. One is tempted to think that the keeper of the Privy Purse will have up his sleeve a whole series of refurbishment and other measures that could be reeled out in any particular year if it looks as though significant increases occur in Crown Estate profits that had not been anticipated. Perhaps it is not too ungenerous to think that the monarchy should benefit from an increase in the profitability of the Crown Estate, because it has given up income from the Crown Estate for 250 years. However, the more serious point is that there could be circumstances in which, over a period of two, three or four years, the monarchy could receive a significantly greater income than was envisaged. This will not necessarily go into the sovereign reserve: therefore, the clawback powers will not necessarily obtain. There is nothing in the Bill to stop that. Are the Government content that, at a time when Crown Estate profits might rise exponentially, or at least very significantly, the Royal Household should have the ability to spend significantly more over a two or three-year period before any review takes place?

In another place, my colleague John Thurso asked why the Crown Estate was getting income from offshore renewable energy. It seems slightly odd that the income of the royal family should depend on the number of wind farms that will be constructed off the coast of Scotland. Might there be an opportunity at some future point to discuss this rather odd aspect of the income of the Crown Estate and whether, given that the income is likely to increase significantly, it might be possible to use it—as my noble friend in another place suggested—to support those communities nearest to the wind, as it were, or more generally to support renewable energy? That is a debate for another day. In the mean time, like the noble Baroness, I support the measure.