Draft Sovereign Grant Act 2011 (Change of Percentage) Order 2017

Simon Kirby Excerpts

Thursday 2nd March 2017 General Committees

[The Economic Secretary to the Treasury (Simon Kirby)]

I beg to move,

That the Committee has considered the draft Sovereign Grant Act 2011 (Change of Percentage) Order 2017.

May I start by saying what a pleasure it is to serve under your chairmanship, Mr Bone? As announced at the last autumn statement, the royal trustees—the Prime Minister, the Chancellor and the Keeper of the Privy Purse—carried out a review of the sovereign grant and concluded that it should increase from 15% to 25% of the Crown Estate’s profits two years previously. That will fund both the Queen’s official duties and the urgent 10-year overhaul of Buckingham Palace. The order will implement that change. The Sovereign Grant Act 2011 is the mechanism through which the state gives the royal family the funding they need to carry out the services they perform on this country’s behalf and to maintain the royal palaces.

Buckingham Palace is an important historic property and one of London’s top tourist attractions, so it is clearly important that the royal estate is properly maintained. Prior to the royal trustees’ review, a series of detailed technical assessments were undertaken to examine the material state of Buckingham Palace. They concluded that elements of the palace’s essential services were significantly beyond their maximum useful life and required urgent replacement, unless the palace is to be at serious risk of fire, flood or safety incidents. It was concluded that the most cost-effective way to do so is to undertake a phased programme of works over 10 years, starting from April 2017. The palace will remain occupied and fully operational as the works are carried out wing by wing, preventing disruption to major public events such as the changing of the guard and the trooping of the colour.

The order provides for that urgent overhaul to be taken forward. It will increase the sum by reference to which the grant is calculated each year. Primary legislation will be introduced to amend the 2011 Act to allow for a reduction in the grant once the renovation of Buckingham Palace is completed. The vast majority of the Crown Estate’s profits will still be retained by the Exchequer. This temporary increase in funding will ensure long-term benefits: the palace will be rendered more efficient, more cost-effective and better fit for the next generations of the monarchy.

There will also be a significant increase in the number of people visiting the Palace, with increased access for schools. It will also offer an opportunity for a new generation of construction professionals to work on an historic building through apprenticeships and graduate programmes. The order will provide the necessary uplift in funding to safeguard buildings that are part of our heritage and to ensure that our royal family may continue to perform the services that they undertake for the sake of this country.

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[Simon Kirby]

I thank the hon. Member for Bootle for raising some thoughtful, interesting and sensible points, and for his support. In response to the hon. Member for Edinburgh East, I remind him that the whole point of the 2011 Act was to bring together the different funding streams and provide for the very eventuality that has arisen.

This country’s monarchy is worth some £57 billion. Every year, millions of people come to look at Buckingham Palace, tens of thousands visit it and hundreds of thousands attend functions where our great monarch, the Queen, is able to be present.

[Tommy Sheppard]

I understand and accept the popularity of Buckingham Palace as a tourist attraction, and as a visitor attraction for people who live in this country. Would it not therefore be reasonable to consider whether the commercial dimension of Buckingham Palace as a venue and an attraction might provide an income stream to fund ongoing capital works to maintain its current quality?

[Simon Kirby]

The hon. Gentleman raises an interesting point. That is exactly what we are deciding today. There will be 115,000 more visitors each year, because there will be increased access. Some 30,000 more children will be able to visit the palace—only 1,500 can currently do so. There will be an additional 110 events every year. This is a long-term solution. The hon. Member for Bootle was right to say that previous Governments of all colours should perhaps have considered this more carefully, but we are where we are and this is a sensible way forward.

[George Kerevan (East Lothian) (SNP)]

Is it the Minister’s intention, once the money has been used to refurbish the palace, to come back and change the Act and reduce the 25%?

[Simon Kirby]

It is. That is clear and I am happy to restate it.

Question put.