Sovereign Grant
House of Commons · Commons Chamber · 1 Sep 2026 · 7 speeches · Official Report
I beg to move, That- (1) provision be made amending the Sovereign Grant Act 2011- (a) to specify the amount of the Sovereign Grant for the financial year 2027-28; (b) to specify the percentage of the income account net surplus of the Crown Estate to be used by the Royal Trustees to determine the amount of the Sovereign Grant in subsequent financial years; (c) to confer a duty and a power on the Treasury to specify the amount of the Sovereign Grant in subsequent financial years in certain circumstances; and (d) for connected purposes; (2) any increase attributable to such provision in the sums payable under that Act should be payable out of money provided by Parliament. The motion stands in the name of the Chancellor of the Exchequer. If we approve it, the Bill to establish the sovereign grant will be published later today, and I am sure the House will have an opportunity for a longer and more detailed debate on Second Reading. The sovereign grant is the annual funding provided to support the sovereign’s official duties and the work of the royal household, including staffing, official travel and the maintenance of the occupied royal palaces. Since 2012, the level of the grant has been determined through a statutory framework that links it to a specified percentage of the revenue of the Crown Estate-an independent public business whose net revenue profits are returned to the Exchequer. Additionally, in 2016, the previous Government agreed a temporary £369 million uplift to the...
I call the shadow Minister.
The background to this motion dates from 1760, when the agreement was reached with George III to surrender the Crown Estate revenues to the taxpayer in return for Government support, but it was not until the Sovereign Grant Act 2011 that financial support was delivered through the sovereign grant. The purpose of the Act was to bring together a patchwork of funding streams and arrangements into a more transparent system with greater accountability to taxpayers. The motion that the Minister has moved proposes three important changes: it sets the baseline for the sovereign grant for next year, it updates the percentage and, finally, it creates a mechanism to allow the Treasury to set the grant in future years in certain circumstances, which includes potentially reducing the amount in the sovereign grant. Given that the grant funds the duties of the monarch and the royal household, we support this approach and the motion. It is worth reflecting that in an era when many institutions struggle to find public support and respect, the monarchy continues to play a unique role in our lives. Whether it is representing Britain overseas, supporting charitable organisations, strengthening diplomatic relationships or bringing communities together at moments of celebration or national reflection, the royal family performs an indispensable public service. We saw that in the response following the death of the late Queen and in the support that His Majesty the King has had as he has taken on...
I welcome the Government's decision to introduce legislation to make it possible for the sovereign grant to be reduced, but there remain a number of issues surrounding the grant that I believe they should also address. The first is the link between the grant and the profits of the Crown Estate. The Crown Estate is quite separate from the monarchy, and operates to generate revenue for the Treasury. That seems a very odd form of indexation, and raises the question of why the grant is not based on the needs of the monarchy or its costs. That, I believe, needs to be reviewed. The fact that the grant could only ever go up-until the Government tabled this motion-was described by the Financial Times as an arrangement whereby in a good year the monarchy would win, and in a bad year the taxpayer would lose. It is therefore right that the Government are addressing that anomaly. The motion also raises the question of how the grant should be set. I believe that the Treasury should have the power to specify the amount on an annual basis. It is important for the funding of the monarchy to be transparent and open to MPs for debate. On numerous occasions I have tried to table questions about these issues, only to be told that this is not something for Parliament to discuss. That has to change. Finally, there are some anomalies relating to the monarch’s wider financial arrangements. Why, for example, are they not subject to inheritance tax? Why is no account taken of the profits of the Duchy...
The sovereign grant does not provide personal income for the King, the Queen or any member of the royal family. It funds the work of the institution, and the largest part of it funds buildings. Between 2025 and 2026, £67.5 million went on property maintenance alone, including the Buckingham Palace reservicing programme and the installation of more energy-efficient heating. These are heritage sites carrying a maintenance backlog that has built up over decades, and the purpose of the reservicing work is to stop a serious risk of fire and flood. We should, of course, take the action that is needed to protect these national heritage assets. The grant is also funding green infrastructure across the estate and better cyber-security, which, in the current international climate, is not an optional extra for any national institution. However, we should treat the increase as temporary in nature, and it is right that the sovereign grant will be readjusted once those projects have been completed. The Government have already committed to legislating for exactly that when the reservicing works finish. That brings me to a key issue: transparency. The taxpayer is funding this grant. Taxpayers are entitled to see where their money goes, and as the hon. Member for Poole (Neil Duncan-Jordan) has already mentioned, Parliament is entitled to hold the Government and the Treasury to account for it. Some of that framework already exists, and it works. Under the Sovereign Grant Act, the royal...
I thank the Minister for his introduction, and for setting the scene for the motion. Clarification is needed, and the Minister has provided that in a way that I think is transparent. The nation needs to know as well. Do the Minister and this House agree that although we must always ensure absolute value for money for every single taxpayer in my constituency and right across the United Kingdom of Great Britain and Northern Ireland, the monarchy provides an immeasurable service, stability and global prestige that far outweighs the costs? Looking at the figures, we see that the Treasury is rightly acting to reduce the overall sovereign grant to £99.9 million for the 2027-28 financial year. Will the Minister acknowledge that that demonstrates a clear commitment from the palace to be transparent and to tighten its belt alongside the public, and that it will ensure that the continuous maintenance of our historic national heritage can continue?
I thank Members from across the House for their questions and for beginning the scrutiny that will take place, should the House agree that the Bill should be laid and for debate to proceed at Second Reading. Let me turn to some of the points that were raised. The shadow Exchequer Secretary, hon. Member for North West Norfolk (James Wild)-I hope he still has that title, given the Opposition’s ongoing junior ministerial reshuffle-raised a whole range of important questions and asked whether I would write to him on these matters. I would be very happy to write to him, and I am sure the letter can be made available to others in this place, given that a whole range of questions were asked and I may not be able to cover them all in concluding. One key question asked by Members on all sides was on the increase in the value of the sovereign grant above inflation. That is, of course, an important question, and one that the trustees went over in detail in making the decision to increase the grant, relative to the pre-Buckingham Palace servicing costs, up to £99.9 million. It is reducing by a quarter from the current year to next year because of the Buckingham Palace refit finishing. A large part of the increase in expenditure has been on the refurbishment and the servicing costs of the occupied royal palaces. That was at £18 million in 2016-17 and next year it will be at £33.6 million. That accounts for a large share of the above-inflation increase. The shadow Minister mentions-the...