The Chancellor will announce the next Budget on Wednesday. Reports have already claimed there will be no pay rise for NHS workers and there is likely to be a freeze on lifetime allowance as Mr Sunak attempts to resurrect the UK’s economy. The COVID-19 pandemic has forced Britain into three different lockdowns over the last year, meaning unemployment levels have shot up. There’s also been the largest UK annual economic shrinkage since records began.
The Queen had to make cutbacks herself within the royal household last September, as a fall in tourism meant the monarchy was set to be hit with £35million income loss over the next three years.
The monarch’s portfolio is estimated to have also lost approximately £500million since the pandemic hit, through its Crown Estate.
Any profits from the Crown Estate are passed to the Treasury — 25 percent of these profits are then returned to the Queen through the Sovereign Grant.
But the Estate then received a Government “bailout” last year to meet any profit shortfalls and make sure the Sovereign Grant remains at its current level.
A Palace spokesperson said: “The revenue from the Crown Estate helps pay for our vital public services — over the last 10 years it has returned a total of £2.8billion to the Exchequer.
“The Sovereign Grant funds the official business of the monarchy and does not provide a private income to any member of the Royal Family.”
However, tax advisor David Lesperance told Express.co.uk that if the Government proposes any changes to the Sovereign Grant, “it’s up to the Queen to respond to that”.
He explained: “The Sovereign Grant is a percentage of the incomes of various things.
“And, so, it’s a little bit of a back and forth between Parliament and the Queen.
“Which is, [the Palace says] ‘I’m going to volunteer to pay this much’.
“And Parliament says, ‘as a result of Covid, for example, we’ve seen a drop in your income or your renovations, so we will up it until the renovations are done’.
“So it is a negotiation, in a sense, as to how much net ends up in the Sovereign Grant.”
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He suggested that the elements of the monarchy which are paramount to the crown and belong to the sovereign — such as the estates — will have to be prioritised if the royal purse strings are tightened.
However, it is worth noting that the formula used to pass money to the Crown prevents the overall amount ever being allowed to fall.
Graham Smith from the anti-monarchy campaign organisation Republic denounced the Government’s “bailout” of the Crown Estate last year as “golden ratchet”.
He claimed: “Once the grant goes up it can never come down and the taxpayer loses out.”
The royal website explained: “Funding from the Sovereign Grant comes from a percentage of the profits of the Crown Estate revenue (initially set at 15 percent).
“The Grant will be reviewed every five years by the Royal Trustees (the Prime Minister, the Chancellor of the Exchequer and the Keeper of the Privy Purse) and annual financial accounts will continue to be prepared and published by the Keeper of the Privy Purse.”