Royal 'cuts' could make Charles the richest king in British history

The Queen is set to become one of the wealthiest crowned heads in Europe after the future of the British monarchy was secured in a historic deal with the Government that will give the House of Windsor a share of the £210m profits from government estates relinquished by George III.

The Civil List and the parliamentary system for funding the head of state are to be abolished, and from 2013, the Queen will receive her funding directly from the Crown Estate, which owns £6bn of British land and business. The deal means the Queen, and her successors, will not have to dip into her private wealth to help fund her crumbling palaces and staff wages, reducing financial concerns for Prince Charles when he ascends the throne, and potentially leaving him with a vast income.

George Osborne told Parliament yesterday he had reached agreement with the Royal Household on funding arrangements. But pro-democracy campaigners said it would leave the sovereign with "untold riches".

In the short term the Queen will be given no cash in addition to the annual £30m she receives from the Government each year to support her public functions and will be expected to rely on her reserve funds built up over the past 10 years to fill any shortfall. She will, however, be given £1m to pay for Diamond Jubilee celebrations in 2012.

Mr Osborne who, together with the Prime Minister, is a Royal Trustee for the Civil List, said he wanted to sort out the constitutional funding issue once and for all. He told MPs in his speech yesterday: "As I outlined at the Budget, the 10-year settlement expired this year and no provision for a new settlement had been made. Her Majesty graciously agreed to a one-year cash freeze in the Civil List for next year."

He said that the shortfall between what the Queen received each year in head of state expenditure and what she spent meant that Royal Household spending will "fall by 14 per cent in 2012-13 while grants to the Household will be frozen in cash terms". Outlining the start of the new deal he said: "After that the Royal Household will receive a new sovereign support grant linked to a portion of the revenue of the Crown Estate, so that my successors do not have to return to the issue so often."

Documents released to The Independent under the Freedom of Information Act revealed the growing tension between the Royal Household and ministers over the escalating public cost of the Royal Family. Buckingham Palace puts the annual cost of the monarchy at £38.2m, but that figure does not include security and other costs which put the bill closer to £180m per year.

Last night it was not clear how much of the £200m Crown Estate profits the monarch would be entitled to each year.

Republic, the group which campaigns for a more accountable Royal Family, described the new deal as "disgraceful". Its spokesman Graham Smith said: "We're seeing sweeping cuts to services provided for the poorest and most vulnerable in our society, yet no serious cuts are being implemented to bring down the cost of the Royal Household. Pegging royal funding to Crown Estate revenue makes no sense. Crown Estate revenue has always been there to provide funds for the government. Our Government must stop behaving as if we owe the Windsors a living. We don't."

A spokesman for the Queen said: "The Household obviously has some challenging times ahead, but we welcome the announcement of the sovereign support grant."

George III – The monarch who frittered away his wealth

Huge debts built up by the profligate George III forced him to hand over the income from his Crown lands, the Crown Estate, to Parliament in return for a fixed Civil List payment as well as profits from the Duchy of Lancaster. Debts amounting to over £3m (the equivalent to more than £200m by today's standards) over the course of George's reign were paid by Parliament, and the Civil List annuity was then increased from time to time. Each succeeding sovereign has renewed the arrangement made between George III and Parliament and the practice has, since the 19th century, been recognised as an integral part of the country's constitutional make-up which would be difficult to abandon.

Prince Charles – The future monarch with everything to gain

Under the new constitutional arrangement the monarch would once again have access to the huge profits of the Crown lands. This would alter the settlement agreed in 1760 which has seen all the profits from the newly named Crown Estate returned to the Treasury. The Estate is one of the world's biggest landowners and its tenants, mostly living in London, pay millions of pounds in rent each year. Their rent cheques will now go directly to pay for the head of state expenditure of the Queen and Prince Philip, and eventually Prince Charles when he ascends the throne. This year, the Crown Estate accounts revealed that its investments and property management returned profits of £210m.

PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
News
ebooksAn unforgettable anthology of contemporary reportage
Money
Welcome to tinsel town: retailers such as Selfridges will be Santa's little helpers this Christmas, working hard to persuade shoppers to stock up on gifts
news
News
i100
News
people
Arts and Entertainment
Architect Frank Gehry is regarded by many as the most important architect of the modern era
arts + entsGehry has declared that 98 per cent of modern architecture is "s**t"
Arts and Entertainment
Soul singer Sam Smith cleared up at the Mobo awards this week
arts + entsSam Smith’s Mobo triumph is just the latest example of a trend
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Maths Teacher

£110 - £200 per day: Randstad Education Leeds: Secondary Maths Teacher for spe...

Business Analyst - Surrey - Permanent - Up to £50k DOE

£40000 - £50000 Per Annum Excellent benefits: Clearwater People Solutions Ltd:...

***ASP.NET Developer - Cheshire - £35k - Permanent***

£30000 - £35000 Per Annum Excellent benefits: Clearwater People Solutions Ltd:...

***Solutions Architect*** - Brighton - £40k - Permanent

£35000 - £40000 Per Annum Excellent benefits: Clearwater People Solutions Ltd:...

Day In a Page

Wilko Johnson, now the bad news: musician splits with manager after police investigate assault claims

Wilko Johnson, now the bad news

Former Dr Feelgood splits with manager after police investigate assault claims
Mark Udall: The Democrat Senator with a fight on his hands ahead of the US midterm elections

Mark Udall: The Democrat Senator with a fight on his hands

The Senator for Colorado is for gay rights, for abortion rights – and in the Republicans’ sights as they threaten to take control of the Senate next month
New discoveries show more contact between far-flung prehistoric humans than had been thought

New discoveries show more contact between far-flung prehistoric humans than had been thought

Evidence found of contact between Easter Islanders and South America
Cerys Matthews reveals how her uncle taped 150 interviews for a biography of Dylan Thomas

Cerys Matthews on Dylan Thomas

The singer reveals how her uncle taped 150 interviews for a biography of the famous Welsh poet
DIY is not fun and we've finally realised this as a nation

Homebase closures: 'DIY is not fun'

Homebase has announced the closure of one in four of its stores. Nick Harding, who never did know his awl from his elbow, is glad to see the back of DIY
The Battle of the Five Armies: Air New Zealand releases new Hobbit-inspired in-flight video

Air New Zealand's wizard in-flight video

The airline has released a new Hobbit-inspired clip dubbed "The most epic safety video ever made"
Pumpkin spice is the flavour of the month - but can you stomach the sweetness?

Pumpkin spice is the flavour of the month

The combination of cinnamon, clove, nutmeg (and no actual pumpkin), now flavours everything from lattes to cream cheese in the US
11 best sonic skincare brushes

11 best sonic skincare brushes

Forget the flannel - take skincare to the next level by using your favourite cleanser with a sonic facial brush
Paul Scholes column: I'm not worried about Manchester United's defence - Chelsea test can be the making of Phil Jones and Marcos Rojo

Paul Scholes column

I'm not worried about Manchester United's defence - Chelsea test can be the making of Jones and Rojo
Frank Warren: Boxing has its problems but in all my time I've never seen a crooked fight

Frank Warren: Boxing has its problems but in all my time I've never seen a crooked fight

While other sports are stalked by corruption, we are an easy target for the critics
Jamie Roberts exclusive interview: 'I'm a man of my word – I'll stay in Paris'

Jamie Roberts: 'I'm a man of my word – I'll stay in Paris'

Wales centre says he’s not coming home but is looking to establish himself at Racing Métro
How could three tourists have been battered within an inch of their lives by a burglar in a plush London hotel?

A crime that reveals London's dark heart

How could three tourists have been battered within an inch of their lives by a burglar in a plush London hotel?
Meet 'Porridge' and 'Vampire': Chinese state TV is offering advice for citizens picking a Western moniker

Lost in translation: Western monikers

Chinese state TV is offering advice for citizens picking a Western moniker. Simon Usborne, who met a 'Porridge' and a 'Vampire' while in China, can see the problem
Handy hacks that make life easier: New book reveals how to rid your inbox of spam, protect your passwords and amplify your iPhone

Handy hacks that make life easier

New book reveals how to rid your email inbox of spam, protect your passwords and amplify your iPhone with a loo-roll
KidZania lets children try their hands at being a firefighter, doctor or factory worker for the day

KidZania: It's a small world

The new 'educational entertainment experience' in London's Shepherd's Bush will allow children to try out the jobs that are usually undertaken by adults, including firefighter, doctor or factory worker