Sovereign Grant Bill

Michael Ellis Excerpts

Thursday 14th July 2011 Commons Chamber

[Mr Jones]

I also chaired the value for money group in the Ministry of Defence, and those costs were on the radar screen for the work it was carrying out. There is a sense of grievance in the MOD and the armed forces that this money comes out of the defence budget. There should be some recognition of this vital work, but it should not come out of the defence budget. That would also avoid the nonsense that we saw last week in The Mail on Sunday, which claimed that the Prince of Wales and other members of the royal family stopped using the royal flight because the cost was being charged to the royal household. I understand that after representations were made to the Treasury the cost was reduced by £6,000 an hour for the use of one of the royal flights. Therefore, a basic subsidy is going to the royal household from the defence budget, which I do not think is right. If the full cost of the royal flight is £13,000 an hour, the Government should pay for that to support members of the royal family who need to travel on official duties. I have no problem with that, but I have a problem with where it comes from and how it is accounted for.

[Michael Ellis (Northampton North) (Con)]

Does the hon. Gentleman not accept that these military equerries and the like are on secondment from military duties? They remain military officers in the service of the Crown via the Ministry of Defence, so it is quite appropriate that they should be paid by the Ministry of Defence?

[Mr Jones]

No, I am not suggesting that somehow they should be taken out of the military while they do these duties, because there is an important link between the royal household and the military, but I do not think that they should be paid for from the defence budget while they are on these duties. In trying to get full transparency in what the royal household costs and therefore what the sovereign grant should be, we need to know about all these other costs so that we assess what is needed to support the sovereign in her work as Head of State. There needs to be transparency.

The Chancellor said earlier that the NAO could look at this, but there is nothing in the Bill that says it will look at costs in kind in relation to the Ministry of Defence and other budgets. If we are to ensure that the royal household has the money needed for the royal family to do their official duties, it is important that there is transparency and that the costs do not fall on the Ministry of Defence, for example.

Some people argue that there should be a cap every year on the sovereign grant. That is possibly a bit too blunt a mechanism. I accept what the Chancellor has said about the size of the reserve. However, if we are to ensure that the efficiencies that have taken place so far in the royal household continue, we need to consider not only how the sovereign grant, but the reserve, is spent each year. It would be quite easy to run the reserve down each year to ensure that more money is needed every year. There needs to be some scrutiny of exactly how the reserve is spent.

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I take the point made by the hon. Member for Gainsborough (Mr Leigh) about the titillation factor in looking at what the royal household spends money on. However, the core point is that this is Government—public—money. If we do not want the royal family to be denigrated but rather to gain support for them, one way would be to ensure that the sovereign grant is well spent and that people see that that is the case. We accept that some items are very expensive to undertake, such as the upkeep of royal palaces and—I have to agree with the hon. Member for Gainsborough—the way in which people have to travel for security reasons, but there must be an emphasis on ensuring that the taxpayer gets value for money. That is a way of strengthening support for the sovereign and the work that she and her family do on behalf of the nation. If we going to get this right, and the Bill is a good attempt at trying to do so, we must ensure that we not only get value for money but are very clear and honest to everybody about all moneys that are spent on supporting the sovereign in the work that she does.

[Michael Ellis]

Will the hon. Gentleman give way?

[Mr Jones]

I was about to conclude, but go on.

[Michael Ellis]

The hon. Gentleman refers to concern about value for money. Does he accept that the royal family bring in hundreds of millions of pounds to the state every year as juxtaposed with the few millions that it costs to run the royal family, most of which is spent on public buildings?

[Mr Jones]

That is another debate and it is difficult to quantify what the hon. Gentleman says is brought in. I do not just look at this in terms of money, but take the more fundamental view that we have a Head of State and should support her in the work that she does on behalf of this nation. What I am saying is that we need to be clear about what that costs. We should be honest about how much it costs, even if it costs more than £34 million, and not hide the way in which moneys are spent.

I broadly welcome the thrust of the Bill, but I hope that the NAO report looks not just at how royal expenditure is spent on the sovereign grant, but at other moneys that are paid to the royal household. It might suggest, for example, that the money that comes from the Ministry of Defence should not come out of defence expenditure.

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[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.

[Michael Ellis]

Does my hon. Friend agree that the fact that each sovereign since 1760 has been asked by successive Governments to sign over the proceeds of the Crown Estate, in and of itself, proves that the estate belongs not to the country but to the person of the sovereign?

[Jacob Rees-Mogg]

My hon. Friend is of course right.

It is often said that Her Majesty is the golden thread that binds our nation together, and the key part of that phrase is the word “golden”. Her Majesty is not the cotton thread, or the silver thread, or the woollen thread, she is a golden thread that binds the nation together as one unique, great and noble nation.

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[Michael Ellis]

I am delighted to follow the hon. Member for Stoke-on-Trent Central (Tristram Hunt), who is clearly a royalist, and who is a founding member of the all-party parliamentary group on the Queen’s diamond jubilee, and I congratulate him on that.

It is easy to try to put a price on monarchy, as I think the hon. Gentleman was saying. Of course, to a certain extent, one has to do that, especially in such a debate as this, but the monarchy, personified so ably by our sovereign, is not bounded by monetary value; it is about honour, nobility of conduct, its historical nature, and an institution of which we can all be proud. If we look in some detail at the mischief that the Bill is trying to redress, the finances of the royal household, designed to support Her Majesty, are currently overly complex. There are no fewer than four grants, which are themselves hidebound and bureaucratic. They have a tendency to be inflexible in that if there is a depletion of one grant, there cannot be a transfer from the other grants to fill the gap. Consequently, the system clearly does not work. That, in and of itself, irrespective of one’s ideological views about monarchy as an institution, needs to be redressed.

However, it goes deeper than that, because the sums we are talking about—approximately £35 million—are, in governmental terms, de minimis. They are minuscule. I dare say that this area of expenditure is more scrutinised, deeply analysed and debated in various forums, including this House, than other areas of the public finances, where hundred of millions, or even billions, of pounds are spent, so there is no shortage of scrutiny whatsoever. It is clear that for the first time since the early 1970s Parliament is looking at a proper modernisation of the finances of the royal household and the monarchy.

[Thomas Docherty]

The hon. Gentleman refers to the level of scrutiny that the household finances receive, but this debate will last less than three hours. Does he not think that that is a flaw?

[Michael Ellis]

I think one can tell from the number of Members in the Chamber that the matter has been debated perfectly clearly.

The Crown Estate is the property of the sovereign and is in the right of the Crown. In the generations since George III’s accession in 1760, successive Governments have gone to the sovereign of the day and asked, “May we have the proceeds from the Crown Estate?” All sovereigns since, including George IV, William VI and so on, have signed away those rights. However, from a legal perspective, the fact that the application has been made and the request granted on each occasion perhaps indicates how the law would look at the matter. It seems clear to me that the revenue is surrendered to the Exchequer and that the legal implication of that act of surrender is that the revenue belongs to the Crown.

The sovereign grant is normally set as equal to 15% of the profit from the Crown Estate, as has already been alluded to. It could be argued that that is sufficient, but it is not over-generous, and no one could reasonably argue that it is disproportionate to the affairs of the Crown. If one takes the care to look at where Crown expenditure actually goes, one will see that much of it goes back to general public usage. For example, most of the communications allowance is spent on writing paper, stationery and clerical costs for responding to items of correspondence received by the royal household. With regard to entertainment costs, tens of thousands of British subjects receive hospitality at garden parties, for example, so costs are incurred in that way.

The royal palaces account for a huge part of royal expenditure. If we did not have a royal family, it is reasonably safe to assume that we would retain the palaces—one would hope that they would not be knocked down to build car parks—and consequently there would be museums that would need to be maintained, although no doubt few people would visit them. The roofs would still need to be fixed and leaks repaired, so the Exchequer would not save. When one takes the care to look at the expenditure, one will see that it is extremely modest and, as has been alluded to, extremely impressive savings have been made over the past couple of years.

The current system is inflexible, overly bureaucratic and has not been as transparent as it could have been. One cannot rationalise romance, and I take the point made by my hon. Friend the Member for North East Somerset (Jacob Rees-Mogg) and others that the institution of the monarchy is about more than just money, but one must bear in mind that although the monarchy is an emotionally unifying institution and, in my view, crucial to the success of this state, it is also susceptible to proper analysis of its finances, which is what the Bill will do. Consequently, I give it my full support.

Civil List

Michael Ellis Excerpts

Thursday 30th June 2011 Commons Chamber

[Michael Ellis (Northampton North) (Con)]

May I personally commend and congratulate the Chancellor of the Exchequer not only for taking the initiative in this matter, which has been pressing for many years, but for making excellent and historic improvements to the current arrangements, which have been unsustainable for some time?

The royal family are one of the few departments of Government—just about the only thing that the Government funds, I would suggest—that make a profit for the taxpayer. They brought into the revenues of the Treasury something in the region of £200 million than was paid out last year. That was a profit for the taxpayer in raw figures. It has also been estimated that one weekend, the weekend of the recent royal wedding, brought hundreds of millions of pounds into the Revenue in tourism, merchandise sales and the like. That profit for the taxpayer is well worth sustaining.

[Mr Kevan Jones]

I take the hon. Gentleman’s point about tourism and other matters that provide a net contribution, but surely under the settlement of the 1760s we cannot really consider the Crown Estate as still being owned by the royal family. It was given up so that it could produce the money for the state that it currently does. I would not look at it in the same terms as the hon. Gentleman.

[Michael Ellis]

The hon. Gentleman may not, but others may choose to do so. In fact, I happen to think that the 1760 arrangements were an historic injustice to King George III and his heirs and successors. There is every reason to say that if the hon. Gentleman is not happy with the arrangements being proposed, perhaps the royal family could sustain having 100% back.

[Jacob Rees-Mogg]

Hear, hear!

[Michael Ellis]

I see that that idea is getting agreement.

[John Thurso]

The hon. Gentleman has tempted me. Part of the 1760 settlement was that the Crown no longer had to pay for the Army. Would it be equitable for it to take back the Crown Estate and the entire Ministry of Defence Budget?

[Michael Ellis]

Now my hon. Friend is tempting me.

It is important to bear in mind, as Professor Vernon Bogdanor has stated in one of his treatises on subject—“The Monarchy and the Constitution”, I think—that it costs about the same to run the royal family as it does to run the Driver and Vehicle Licensing Agency in Swansea. I venture to suggest that the royal family attract far greater support from the British public than most institutions.

The issues at stake are important, and they are: fairness, accountability and transparency, and the necessary flexibility, which has not been built into the system to this point. As my right hon. Friend the Chancellor of the Exchequer has pointed out, the previous system, although not that old, was quite frankly archaic, bureaucratic and burdensome. It was also inflexible, so that if money was saved in one department—for example, in travel arrangements—it could not be spent on, say, repairing a leaking roof. The previous arrangements were unnecessarily bureaucratic, and they urgently needed reform to save taxpayers’ money and to save time. They also needed to be more accountable and transparent, which is what these necessary reforms will achieve.

If we take the trouble to look at how the money is spent, we see, for example, that £400,000 is spent on communications. I venture to suggest that much of that money is spent on communication with members of the public who write in to the palaces, and on other necessary duties, such as inviting to garden parties the tens of thousands of people—and it is, in fact, tens of thousands—who enjoy and appreciate visiting the royal households by invitation every year. This money is not spent on trifles; it is spent for the general public’s enjoyment.

The same thing goes for the palaces. Much of the expenditure goes on the maintenance of royal palaces. I venture to suggest that not even the few republican diehards whom we might find in this House would propose that the royal palaces be knocked down after the abolition of the monarchy and car parks built in their stead. Even in the absence of a monarchy—may God forfend—those palaces would have to be maintained. They might be museums or something similar, but they would still need the maintenance that they need now. In fact, they have been allowed to fall into a state of disrepair because of the lack of funds, which only makes it more expensive to repair them.

I also support the modernising arrangements as they relate to the Duchy of Cornwall. That is welcome, because in future the heir to the royal house will be able to secure funds and revenue from the Duchy of Cornwall without necessarily being male—that is, without being the Duke of Cornwall. That is important and follows other reforms, in the tradition of the Demise of the Crown Act 1901. Formerly, offices of the state were cancelled on the demise of the Crown. However, the various Acts that Parliament has seen fit to pass over the past 100 years or so have meant that such positions—ministerial positions, judicial appointments and the like—could continue. My right hon. Friend the Chancellor of the Exchequer’s further reform, making it necessary only for an Order in Council after the completion of one reign and the beginning of another, simply follows in that historic tradition.

I commend these measures, and I support them in full. I congratulate the Chancellor on bringing them forward, and I invite Members of this House to consider supporting Her Majesty in her 60th jubilee gift, which the House is currently considering.

[Mr Denis MacShane (Rotherham) (Lab)]

This has been a most enjoyable debate. With the need to refurbish some of the royal households with up-to-date wallpaper, we have learned that the fortunes of Osborne & Little might now increase. We heard from my right hon. Friend the shadow Chancellor some historical evidence of our hon. Friend the Member for Bolsover (Mr Skinner) making interventions from a sedentary position when this issue was last discussed in the 1970s. People listening to this debate from outside this place might have felt that some of the speeches by right hon. and hon. Members were delivered not so much from a sedentary position but, as it were, from a kneeling position, if that were possible in the House. I would say gently to the hon. Member for Northampton North (Michael Ellis) that some of us think that the land in this country that is not in specific private ownership belongs to the people. For us, the notion that the royal family is signing generous cheques to the taxpayer sits a little oddly.

I want to raise one substantial point today. The Chancellor and the shadow Chancellor said that we needed to look back to 1760, but if my history—learned from Linda Colley and other historians of the period—serves me right, it was actually a cunning manoeuvre by the late King George III that substantially increased royal revenues, rather than the act of generosity that it is sometimes presented as. One part of the motion, which I think the House will support, that worries me conceptually is the notion that the time of transition from one monarch to another is not the time for reflection on the arrangements that we want for our Head of State. The notion that we are going to write down a settlement that cannot be debated for another 200 years might therefore need some reflection on Second Reading.

I respect the Queen and I have travelled with other members of the royal family, although I hate the term “minor royals”—it is offensive to the very hard-working men and women who give a lot of their time to public service. If I can, I always welcome in person any of them who come to my constituency, because they are always well received and well liked. Her Majesty came to the Advance Manufacturing Centre in Catcliffe with Prince Philip last November and stood for an hour asking good questions. I was amazed at her stamina and her presence; the visit really cheered up all the people there. This just goes to show that 85 really is the new 55.

None the less, how does one justify 159 butlers, valets, cooks, dressers, housekeepers and the rest for Prince Charles? [Interruption.] We are all reading the memoirs written by the father of the hon. Member for North East Somerset (Jacob Rees-Mogg) in The Times, and there is a lovely entry today about how he and Rupert Murdoch managed to cheer up the Queen at a lunch back in the 1970s; I would not have minded eavesdropping on that. But why on earth, when we keep a royal flight, is Prince Charles taking a jet trip from Mr Joe Allbritton, who is not British at all but some kind of American oligarch and millionaire—

[Michael Ellis]

Why not?

[Mr MacShane]

The hon. Gentleman, from a sedentary or kneeling position, asks why not—

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[Martin Horwood (Cheltenham) (LD)]

I speak as—I hope—a radical democrat who really believes that sovereignty resides with the people and should be only cautiously delegated to Crowns and perhaps even Parliaments. Nevertheless, I declare myself a monarchist, not just for sentimental reasons but because I believe that the monarchy performs an important role as an impartial focus for national sentiment at a time when public confidence in other public institutions, with which we are of course familiar, may be seen as being at an all-time low. Moreover, it is clear—certainly from the celebrations of the royal wedding day in my constituency—that royal occasions provide a terrific excuse for a party which will make people feel good, and that must be a good thing at a time when we are increasingly measuring national well-being as well as simple economic indicators.

Let me say to my hon. Friend the Member for Northampton North (Michael Ellis) that I consider those to be rather better justifications for the civil list and the spending of public money on the monarchy than the fact that monarchy offers better value for money than the DVLA, which I think is a dangerous road on which to embark. Obviously affection for, and confidence in, the monarchy has been reinforced by the conduct of the current Queen, who has performed her role over many decades with enormous dignity and professionalism. It is important that the monarchy has also moved with the times, not least by responding appropriately to the recent austere financial situation in which this country finds itself. I am therefore very supportive of the Chancellor’s announcement.

[Michael Ellis]

As the hon. Gentleman is so eloquently expressing his support for the monarchy, will he be contributing towards Parliament’s gift for the Queen’s diamond jubilee—the window?

[Martin Horwood]

I think that is a rather inappropriate question actually, but I was strongly inclined to do so, although it might be a rather expensive window, so if we can bring the cost down a bit, that might be appropriate.

I was making the important point that it is entirely right to bring greater audit and transparency to the arrangements for the Head of State. My hon. Friend the Member for Bristol West (Stephen Williams) said that too, and he is also absolutely right that public money and public confidence must go together. However, some issues remain to be tackled if we are to maintain that confidence over future generations for the Queen’s heirs and successors.

I am pleased that the Minister for Equalities is sitting on the Front Bench as well as the Chancellor, because I want to discuss the issue of absolute cognatic primogeniture. I am not referring here to the situation of Catholics in the succession, which is simple in terms of equalities but rather complicated in terms of the role of the Church of the England as the state Church; that raises all sorts of issues. The issue of succession to the Crown by women in order of birth is important, however. Without wanting to cause any embarrassment to Their Royal Highnesses the Duke and Duchess of Cambridge, it is an issue on which we have a window of opportunity that may close in a year or so.

This was an issue in Sweden in the 1980s, when the birth of an infant daughter following the birth of the young Crown Prince Carl Philip meant that it became a question of disinheriting a young heir to the throne. It would be unfortunate if we were to go down that path in this country, so if we want generally to modernise the monarchy, now would be a good moment for this issue to be addressed alongside the financial issues. We could then look forward to future generations of the monarchy enjoying the same affection and confidence as Her Majesty the Queen.

Oral Answers to Questions

Michael Ellis Excerpts

Tuesday 16th November 2010 Commons Chamber

The Chancellor of the Exchequer was asked—

[Michael Ellis (Northampton North) (Con)]

1. What recent assessment he has made of the effectiveness of the Office of Tax Simplification.

[The Chancellor of the Exchequer (Mr George Osborne)]

May I add my congratulations to the couple and say that we wish them every happiness? I am not sure that they will be particularly interested in this answer, but I hope that the House will be.

The Office of Tax Simplification was created by the coalition Government in July to reduce the complexity of a tax code that has doubled in size over the past decade. Last week, the office produced a comprehensive list of the 1,042 reliefs that now exist in the tax system. By the time of next year’s Budget, we will have received its advice on which reliefs can be simplified or abolished to be consistent with the Government’s wider objectives.

[Michael Ellis]

I congratulate my right hon. Friend on establishing the Office of Tax Simplification. He will be aware that the tax system in this country is labyrinthine in its complexity, and small businesses in my constituency of Northampton North have been adversely affected by it. Can my right hon. Friend assure me that the new Office of Tax Simplification will sort out this complexity sooner rather than later?

[Mr Osborne]

I can give my hon. Friend that assurance. A few months ago, he and I visited some small businesses in his constituency, many of which were suffering under the burden of a tax code that has grown from 4,900-odd pages in 1997 to 11,500 pages today. The Office of Tax Simplification is specifically looking at the taxation of small businesses as well as at the issue of tax reliefs. The small business report will be coming out later next year, but we will get an interim report in time for the Budget.