Buckingham Palace has released its annual financial report, and you can probably guess which story the tabloids ran with: The eye-popping cost of Harry and Meghan’s renovations at Frogmore Cottage, which came to roughly $3 million. What makes that price tag particularly controversial is the fact that it didn’t quite come from their own pockets.
Who exactly pays for the royals is an old debate: Do these people live on the public’s dime, or what?
The monarchy’s finances are incredibly convoluted, and parsing them requires some understanding of the institution’s history. It’s an extremely confusing system that is the result of a thousand-year shift from a king who actually rules to a representative democracy, where monarch exists for state visits and golden carriage rides.
The royals are like a particularly weird category of government employee, entitled to their position by birth. As of 2012, the work of the royal family is funded by something called the Sovereign Grant. It’s a percentage (15 to 25) of the annual revenues from the Crown Estate, which is all the property tied up with the monarchy itself. All that money is paid into the Treasury, and Parliament doles some out for the activities of the monarch as Head of State and maintaining all her houses which are historic and therefore presumably a bunch of money pits. (“The property had not been the subject of work for some years and had already been earmarked for renovation in line with our responsibility to maintain the condition of the occupied royal palaces estate,” Sir Michael Stevens, Keeper of the Privy Purse, told the BBC about Frogmore.)
It’s an extremely confusing system that is the result of a thousand-year shift from a king who actually rules to a representative democracy, where monarch exists for state visits and golden carriage rides.
The Sovereign Grant replaced an earlier way of doing business, the Civil List, which was an annual grant that could vary more from year to year. That was established in 1760, when George III cut a deal with Parliament, turning over the revenues of hereditary royal estates and the job of administrating the government in exchange for, basically, them cutting him an annual check. For the 2018-19 fiscal year, the Grant amounted to £82m—£33m of that for maintenance, particularly on Buckingham Palace, which needs a substantial overhaul.
The Crown Estate belongs to “the crown,” but it’s not the monarch’s personal fortune, either. Let’s use the White House as an (admittedly imperfect) comparison. The physical building “belongs,” in a sense, to the office of the presidency, but it doesn’t belong to Donald Trump, just as it didn’t belong to Barack Obama. Similarly, Buckingham Palace isn’t precisely Queen Elizabeth II’s personal home—it’s one of the monarch’s official residences, in their capacity as monarch. She couldn’t wake up tomorrow, say “nah” and resign the crown and keep her cozy home in London and her suburban retreat at Windsor, maybe rent a few bedrooms out on Airbnb. (She would get to keep Balmoral and Sandringham, which she owns outright as Elizabeth, not Queen Elizabeth II.)
Buckingham Palace is just the most visible and famous piece of property tied up under the umbrella of “the Crown,” rather than the person wearing it. The Crown Estate is massive. The Independent explained:
The group manages a property portfolio worth £12.4bn, and the latest available figures show that it delivered £329m to the Treasury for the 2015/2016 financial year.
Property within the Crown Estate’s central London portfolio includes almost all of Regent Street and around half the buildings in the St James’s area, comprising retail, residential and office space.
Away from the capital, the Crown Estate owns 14 retail and shopping parks and three shopping centres, as well as a large portion of the UK’s offshore windfarms – mainly because the estate manages the seabed out to a 12 nautical mile limit.
As the fact that Crown literally owns the seabed makes clear, this is a fortune rooted in feudalism. It dates back to a time when the king essentially was the government. The current means of funding the monarchy is a legacy of the days when the monarch actually did something and needed money for the actual work of governing, a reflection of the fact that it took centuries for the balance of power to tip fully Parliament’s way.
The 1760 deal wasn’t some sort of magnanimous donation on the part of George III—it formalized the fact that Parliament was actually doing the governing. It was part of the very long, very slow handoff from the monarch to Parliament and ultimately the people of the United Kingdom, which still hasn’t been completed, not really—the government is still technically “Her Majesty’s” government. So, sure, the Crown “pays for itself,” if you look at it from one perspective. But from another, that’s not really the Crown’s money, either—it belongs to the public of the United Kingdom. Newsweek spoke to an expert on royal finances, David McClure, who argues that the Crown Estate is basically public land, and the Treasury “totally accepts that the Crown Estate is public property.”
Crown lands have been historically used to fund government expenditure, even before the time of George III. Before William III, the sovereign administered these funds. But after the Glorious Revolution of 1688, that responsibility began to fall to parliament.
As the U.K. transitioned to a constitutional monarchy, the power of the sovereign waned and the costs of government increased. This saddled the monarch with personal debt, leading George III to surrender control of all revenue from the Crown Estate.
Each monarch technically surrenders the estate again at the start of their reign, but, as McClure argued, “The sovereign isn’t doing us a favor by handing this over.” He continued: “If you’re going to reverse that, you’d have to say ‘the Queen should be paying for the running of the country.”
Even if it were just the monarch’s personal fortune, it’s worth remembering that personal fortune would have been built on, again, feudalism. Which is true of Elizabeth’s Privy Purse, her money as sovereign outside the Sovereign Grant, which is fattened considerably by the Duchy of Lancaster, which goes back to the 1300s and is not included in the Crown Estate. Just some perspective to keep in mind!
So, around $3 million of the renovations were paid for by Sovereign Grant funds. That’s the controversial money—the “taxpayer-funded” part. The taxpayers of the United Kingdom are not directly forking over their money to see that Harry and Meghan live in Frogmore Cottage rather than the fishbowl of Kensington Palace. However, Parliament does pay a nice chunk of change from the Crown Estate back to the royal family that would otherwise stay in the Treasury and be used for other purposes that have nothing to do with the royals and their personal accommodations. It’s not directly “taxpayer funded,” but the Crown doesn’t pay its own way, either—though, of course, monarchists point to things like tourism revenues as follow-on financial benefits.
But it’s also worth pointing out that while this fact plays particularly well into the British tabloids’ ongoing narrative of Meghan as spoiled American actress diva—when again, you’ll never convince me that she’s more entitled than people who were quite literally born with titles. Renovations for Will and Kate’s residence at Kensington Palace cost £4.5million in Sovereign Grant money over two years. If there’s a problem, it’s not Harry and Meghan—it’s the whole circus.