How much do taxpayers fund the Royal Family, and what, if anything, do they get in return?
The Duke and Duchess of Sussex, more commonly known as Prince Harry and Meghan Markle, have set off a lot of drama by announcing a plan to quit as ‘senior’ royals and move to Canada. Their main reason seems to be the intense and often racist press scrutiny that has been directed at Meghan since she started dating Harry in 2016.
In response, many Brits have expressed disappointment or disagreement with the idea that members of the royal family can opt out of their duties. A common refrain is that it’s unfair because royal lifestyles are funded by UK taxpayers. (Meghan and Harry have said they will “work to become financially independent”.)
The Queen and her household get something called the Sovereign Grant each year, which is a sum of money from the government (who is funded largely by tax). It totalled £82.2 million in the last financial year. The Sovereign Grant can be used only for official expenses, not personal ones, although when your official job is to be a royal and live in a royal palace and live a royal life, that distinction can be a bit blurry. But it can basically be thought of as the equivalent of a workplace paying their employee a salary and covering their work travel, accommodation and other work-related expenses.
However, only the Queen and her husband get the equivalent of an annual salary from the Grant. The other royals, including Harry and Meghan, do not, although the Sovereign Grant does pay for some of their expenses, such as the renovation of their home.
Some people don't think that the UK government should spend any money on essentially hiring some posh people to cut ribbons and give speeches and entertain foreign dignitaries. Other people think that having a Royal Family is a good deal; because they attract money-spending tourists to the UK or provide valuable statesmanship or just make many Brits who like the tradition of the institution feel happy. As with anything their government does, it’s therefore up to the British people to weigh up the pros and cons of paying for a Royal Family and elect politicians whose policies reflect the wishes of the country as well as possible.
Factoring into that choice should be the knowledge that the annual payments to the Royal Family are comparatively quite small (the Sovereign Grant works out as costing £1.24 per taxpayer) and that many of the assets (things of value) that the Grant pays for actually belong to the UK state, not the Royal Family members. This includes Frogmore Cottage, where Meghan and Harry have been living, and which was recently renovated with £2.4 million of taxpayer money. This means that while Harry and Meghan can live there rent free, they can’t sell it and any profit the accommodation makes (say if they rented it out) has to go back to the Treasury.
The other thing to note is that even if all taxpayer funds were withdrawn, members of the monarchy would still be unusually wealthy people. All royals have private sources of income, much of which comes from having lots of valuable land and property and art and other such assets. In fact, a good chunk of Harry and Meghan’s day-to-day funding comes from a collection of such assets owned by the Queen and known rather grandly as the Duchy of Lancaster.
These big private money sources may actually be more problematic for some people than the Sovereign Grant. A lot of this wealth was acquired when Britain was an absolute monarchy, which meant the rulers could just take whatever they fancied without having to work for it or compensate their subjects. Secondly, the Royal Family is unique amongst British citizens in that some of its wealth is exempt from all taxes. (The Queen and Prince Charles do now pay money to the Treasury in lieu of tax, but the exact amount is a secret.)
Both of these things will strike many people as unfair, and an example of how low taxes, especially on inheritance, can both increase economic inequality and compound it over generations.
Read our explainer on: economic inequality.