The British monarchy has long been a symbol of tradition, history, and national identity in the United Kingdom. While the monarchy plays a crucial role in the country's cultural and political landscape, it also has a significant impact on the UK's economy. With Queen Elizabeth’s passing after 70 years on the throne, and King Charles’ coronation, public support for the monarchy has been at a historic low, with only 3 in 10 Britons considering the monarchy as very important. This has been indicative of the declining support for the monarchy over the years. But does the monarchy actually contribute to the British economy, or is it just a misuse of taxpayer money?
One of the family’s main sources of income is the Sovereign Grant, which was set at £86.3 million, amounting to £1.29 per capita in the UK. The Grant’s origins date back to an agreement King George III made with the British government in 1760 to give up income from the monarchy’s properties in exchange for a fixed annual payment.
The Sovereign Grant is usually spent on the upkeep of properties and of staff costs. Recent repairs to Buckingham Palace and costs associated with King Charles succeeding Queen Elizabeth, caused total spending to rise to £107.5 million this year, and money had to be drawn from reserves to fund this extra spending. Moreover, while properties such as Buckingham Palace are owned by the monarch for the duration of their reign, they cannot be bought or sold, and are instead independently managed by a board approved by the prime minister. The profits earned by these properties go to the Treasury and are used to fund public services like the police and hospitals.
Though the Sovereign Grant has been fixed at 15% of the Crown’s profits each year, the government announced that this percentage will be cut to 12%, due to the significant increase in profits from six new offshore wind farms on the Crown Estate, worth £1 billion. Though the amount of Sovereign Grant remains the same, the amount given to the Royal Family would increase substantially, at least by £3 million, in order to fund the Buckingham Palace restoration project.
Apart from this tax funded payment, the family receives money through an estate called the Duchy of Lancaster, which covers more than 18,000 hectares of land in areas such as Lancashire and Yorkshire, as well as property in central London. Worth £654m, it generates about £20m a year in profits for the family, which they can spend as they wish. These properties, together with the Royal Collection of Art, and the Crown Jewels, account for nearly £25.5 billion.
Republic, an organization that lobbies for an elected head of state, has estimated the total annual cost of the monarchy to be £345 million.
However, the consultancy, Brand Finance argues that the cost of the monarchy is incomparable to the countless benefits they bring in for the economy. The UK's royal palaces, castles, and landmarks, including the Tower of London and Windsor Castle, attract millions of tourists from around the world each year. These visitors spend money on accommodation, dining, transportation, and souvenirs, contributing significantly to local economies and creating jobs. The overall uplift to the tourism sector is estimated to be at around £550 million. Even the birth of Prince Louis itself generated £50 million for the economy through souvenirs, baby clothes and memorabilia. Factoring the impact the monarchy has on trade, tourism and art, Brand Finance estimated that the monarchy brought in £1.77 billion to uplift the UK economy in 2017.
Though the benefits brought to the economy are innumerous, the average citizen does not feel the impact of the monarchy in their lives, which is why the argument against spending taxpayers’ money on such an elitist institution, especially during tough times, is strengthening. The Royal family needs to be seen as a bargain to the average citizen - spending £1.29 each year should be justified for the jobs and economic activity the monarchy brings in. Ultimately, the monarchy's value to the UK's economy extends beyond mere financial calculations, encompassing intangible assets that contribute to the nation's overall well-being and identity. Especially in the age of Brexit, the UK needs to rely on its soft power to ensure diplomatic relations with other countries and improve their image, in order not to lose their traditions and long-withstanding history that has impacted millions all over the globe.
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