On this royal, Platinum Jubilee weekend, Alice Guy takes a look at the history of the royal finances, how the Crown Estate works, how the Queen makes her money and why a ‘genius’ plan to open up Buckingham Palace helped to save the royals’ finances.
In 1953, when the young princess came to the throne, she was well prepared for coronation ceremony. She reportedly practised wearing the heavy crown for hours up and down the corridors of her royal palace and later commented that the crown “weighs a tonne”.
A vintage Reader’s Digest reports on preparations for the ceremony and reveals that, “The Earl Marshal will invite 7,600 people to the ceremony itself, in Westminster Abbey.” And the dress code will be strict, “complicated protocol governs both robes and accessories. A viscountess, for example, is entitled to a train a yard and a quarter long, while a baroness wears only a yard.”
No doubt, behind the scenes, royal servants were also preparing Her Royal Highness Princess Elizabeth of York for the financial realities of managing the royal finances. As well as becoming Queen of the then British empire, she was to take on a complex royal financial system that is often the subject of public scrutiny.
History of the Crown Estate
The Crown Estate was founded in 1760, although the ownership of some property dates all the way back to 1066.
After the Norman conquest, William claimed the right to all the land in his kingdom. And despite the passing centuries, the Crown’s underlying ownership of land still exists in English law. That means there is always a presumption that land is owned by the Crown unless it can be proved otherwise.
As a result, the Crown owns around half the coastline around England, Wales and Northern Ireland. In total, the Crown Estate owns assets worth approximately $14.1 billion, including Windsor Castle, pictured below, and Buckingham Palace.
How does the Crown Estate work?
The Crown Estate is no longer managed by the royal family.
In 1760, George III, facing mounting debts, reached an agreement to surrender the net income of the Crown Estate to the government. The Crown lands would be managed on behalf of the government and in return, the king would receive a fixed annual payment that became known as the Civil List and later the Sovereign Grant.
In 1961, the Crown Estate Act set out that the estate would be run by a board. This means that although the monarch officially owns the Crown Estate, it’s managed separately, and the Queen is not directly involved in management decisions.
Does the Queen have private wealth?
The Queen also has private assets, including Balmoral and Sandringham, which are hers to manage.
It’s estimated that the Queen’s private wealth is around £365 million, up £15 million from 2020.
Her private wealth includes blue-chip shares and a massive art and stamp collection: the stamps alone are worth an estimated £100 million.
Bizarrely, the Queen also officially owns all the unmarked mute swans in a certain section of the Thames and all the dolphins, porpoises and whales within three miles of the UK coast.
How much does the Queen earn?
The Queen gets her money from three sources, the annual royal sovereign grant payment, the Privy Purse and her private, personal wealth and inheritance.
The sovereign royal grant, currently 25% of the Crown Estate’s net income, is a lump sum given to the royal family to fund their official duties, maintain the occupied royal palaces and cover the cost of events such as garden parties and royal travel. Last year, the Sovereign Grant was £86 million or around £1.29 per taxpayer.
In 2021, the Crown Estate booked a net profit of £269 million. Its assets include offshore wind farms, retail assets in the West End and even a McDonald's.
The Privy Purse is managed separately to the Crown Estate and is a group of private assets from the Duchy of Lancaster, held on trust for the monarch. Queen is entitled to the net income but does not own the assets outright. The estate owns around 46,000 acres and in 2018 the net income was £20 million.
The royal finances are always controversial and managing the Queen’s wealth is often a juggling act between investing for the future and being sensitive to public opinion.
The Queen has learnt how to adapt and move with the times. And there were several occasions where she took on board public opinion and changed the royal rules.
In the middle years of her reign, the Queen came under increasing pressure to give up her royal privilege and pay income tax like the rest of us. And in 1992, she and Prince Charles, chose to start paying income and capital gains tax. The Queen will also pay inheritance tax on assets from her private estate, unless she passes them directly to the next monarch.
Amusingly, she also pays around £1,338 council tax for Buckingham Palace, which is in band H and £2,365 council tax for Windsor Castle. We wonder if she’ll receive the £400 energy discount, announced this week, to help with her fuel bill!
Like any business, there were also times when “Royal Plc” faced a financial shortfall.
In 1992, following a tough year with several royal scandals, the Queen was left with huge £37 million bill to repair Windsor Castle after a fire gutted the property.
Windsor Castle is owned by the Crown Estate and in theory, the taxpayer should have footed the bill. But with public pressure mounting, the Queen knew she had to find another way.
The Queen, usually intensely private about her personal life, agreed to open Buckingham Palace to members of the public.
Speaking on a recent documentary, royal commentator Julie Montagu, Viscountess Hinchingbrooke, described a high-level royal meeting held just five days after the fire.
She revealed that the Queen, Prince Philip, their children and a few private secretaries came up with, “a pretty genius plan – open up Buckingham Palace to the public. What is extraordinary about this genius plan is that it was thought of by the Queen herself. Even if her courtiers have thought of this as a way to raise money, I don't think they would have ever approached her on this.”
The opening of Buckingham Palace, pictured below, was a roaring success and what was meant as a temporary measure became permanent. The initial £8 entry charge went towards Windsor's restoration and covered around 70% of the repair bill, while the Queen donated £2 million of her personal wealth to the refurbishment.
Over the last 70 years, the world has changed. Prime ministers have come and gone, and many business empires have risen and fallen. But the Queen has kept on steering a steady ship as the CEO of “Royal Plc”.
In her own words, “I cannot lead you into battle, I do not give you laws or administer justice but I can do something else, I can give you my heart and my devotion to these old islands and to all the peoples of our brotherhood of nations.”
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