Should the public pick up the tab for the royal wedding?

With families across the country tightening their belts, Chris Bowlby takes a closer look at the financial issues relating to this year's royal wedding.

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Amid the mass of information emerging about the forthcoming marriage of Prince William and Kate Middleton, the question of who is paying for the event was negotiated and announced with care. Costs are to be split between the families of the couple and the government – with the latter footing the bill for security measures.

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At this time of austerity, the royal family has also been involved in broader negotiations with the government about economising, all with the aim of deflecting political and public criticism. And this is not the first time that the funding of the royals has proved a source of debate – the subject has a long and controversial history, and an event like a royal wedding is sure to throw it back under the spotlight.

Ann Lyon, a constitutional historian at the University of Plymouth, points out that “most of the great constitutional crises of the Middle Ages and after turned on the king’s demands for money”. Magna Carta itself included provisions restricting how much the monarch could claim for events such as royal weddings – Clause 12 permits him to raise a “reasonable aid” only for the marriage of his eldest daughter.

Tension was constant between monarch and people over the distinction between the revenues of the sovereign and those of the state. Until the late 17th century, suggests Ann Lyon, monarchs “considered the power to raise revenue a vital part of their prerogatives and were, ultimately, prepared to resort to war”. After the particularly bitter conflicts between monarch and parliament during the Civil War, legislation was passed that attempted to settle the matter. A ‘list of civil charges’ or ‘Civil List’ was established, designed to pay the monarch for the cost of performing official duties. Another significant milestone came in 1760 when George III agreed that, in return for Civil List payments, the crown would surrender in perpetuity income from the Crown Estates.

More recently, the battle has been fought over how far royal income should be subject to parliamentary scrutiny. The size of the Civil List was traditionally agreed at the beginning of each reign, but since 1972, in more inflationary times, new settlements have been agreed more regularly. And the chancellor of the exchequer recently announced that, at the time of the next renewal in 2012, the payment will remain at its current level of just under £8m a year.

However, expenditure on the royal family is not confined to the Civil List. Some costs are paid through the Privy Purse – for example, income from the Duchy of Lancaster. The government makes ‘grants-in-aid’ for expenses such as the cost of royal transport and communications, or the upkeep of royal residences. Government departments also foot the bill for expenses such as security connected with royal activities.

So royal finances are a highly complex historical inheritance. As Professor Vernon Bogdanor put it in his book The Monarchy and the Constitution: “There are probably few members of the public who understand either the arrangements or their rationale.” Further complexity is added by separate arrangements for other members of the royal family such as the Prince of Wales, who pays for public and private activities out of income from the Duchy of Cornwall.

The extent to which members of the royal family are obliged to pay tax on their private income is another issue that’s excited much debate in recent decades. In 1992 the queen “volunteered” to pay income tax and capital gains tax.

The royal family has always sought to avoid the scrutiny of its expenditure that, say, a government department might expect. However the family knows that criticism of what is seen as extravagance could undermine public support. As Ann Lyon says: “Since Victoria’s reign the institution has transformed itself into a ‘public service monarchy’, treading a fine line between mystique and accessibility.”

Members of the royal family and their staff want to be seen to share in Britain’s pain during the current economic downturn as part of the ‘accessibility’ of modern monarchy. But maintaining the mystique, and exhibiting it at events like a royal wedding, is expensive: pomp and circumstance has its price. And who pays for it has always been a sensitive matter.

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Chris Bowlby is a presenter on BBC radio, specialising in history. This series is produced with History & Policy. You can find out more about them and read their papers at www.historyandpolicy.org