Queen Elizabeth II of the United Kingdom 1985 by Andy Warhol 1928-1987

My latest column for the New York Times is on the Queen and her finances.

The British queen is down to her last pennies. Well, actually, her last millions of pennies. Last month, the Public Accounts Committee — Parliament’s watchdog on public spending — published a damning survey of the state of the royal finances. The queen had spent down her ‘reserve fund’, a savings account built up by years of surplus public subsidy, to ‘a historically low level’ of only £1 million ($1.6 million), from £35.3 million in 2001.

Trying to make sense of the royal finances is like trying to eat spaghetti with a spoon. Here’s the puzzle: Queen Elizabeth II is one of the richest people in the world. Among her private property is Balmoral Castle, her residence in the Scottish Highlands, which was purchased, together with a 50,000-acre estate, by Prince Albert for Queen Victoria in 1848. Queen Elizabeth also owns stud farms, personal art and fine jewelry. According to Forbes magazine, her personal worth is $500 million.

If the Queen is so wealthy, how can she be strapped for cash? In 2010, it emerged that the queen had even privately applied to a government fund normally reserved for public institutions to provide heating programmes for low-income families to help with Buckingham Palace’s heating bills. Turning the request down, a government official commented, ‘I also feel a bit uneasy about the probable adverse press coverage if the palace were given a grant at the expense of, say, a hospital’.  Why is the queen reduced to acting as if she lived in public housing? The short answer is that she does live in public housing — just in an exceptionally grand manner.

The Queen does not own Buckingham Palace; the nation does. Wealthy as she is, the Queen sees no reason to pay for the upkeep of the palace, since she lives there by virtue of her public duties. Behind this tussle over who pays for what is the fundamental ambiguity of a parliamentary democracy headed by a hereditary monarch. This historic anomaly is the key to unraveling the mysteries of the royal finances. It explains how we can have a queen who is privately so very rich, yet who publicly pleads poverty

The modern muddle began in 1760. King George III found himself £3 million in debt — a colossal sum, equivalent to more than £500 million in today’s money. To extricate himself, he surrendered to the government the management of, and revenues from, most of his property. In return, he received a fixed annual payment, known as the Civil List.

This was, in essence, how the British government subsidized the royal household for 250 years — until 2012, when Parliament abolished the Civil List and replaced it with the Sovereign Grant. Ostensibly, this was to rationalize the royal finances: The Civil List was the main source of state funding for the royal family, yet it was supplemented by a host of other grants — to cover palace maintenance, communications and travel costs. The Royal Yacht Britannia, for instance, was separately funded to the tune of £11 million a year, until it was retired by Prime Minister Tony Blair in 1997 as a cost-cutting measure.

The Sovereign Grant was designed to sweep all that away. Rather than the queen’s receiving the Civil List and a suite of subsidies, the level of the grant is simply set at a 15 percent cut of the profits from the Crown Estate. It is a remunerative new arrangement, which projects an income steadily rising to £37.9 million this year, from £36.1 million for 2013.

Despite its name, the Crown Estate is a vast property portfolio that belongs to the crown as an embodiment of the state, and not to the reigning monarch as an individual. Among the assets held by the nation that the queen enjoys in her role as the sovereign are Buckingham Palace, Windsor Castle, the world-renowned royal art collection and the Crown Jewels. The queen could, if she so desired, sell Balmoral Castle tomorrow, as it is her private property. But she could not sell the Crown Jewels; she has no legal title to them. If the monarchy were abolished tomorrow, Buckingham Palace and the royal art collection would, as before, be public property. But the queen would not be obliged — as the humourist Sue Townsend imagined in her 1992 novel The Queen and I — to live in a slum: Her personal wealth would enable her to keep company with Russian oligarchs and Saudi royalty indefinitely.

Continue reading in the New York Times.


The image of the Queen is by Andy Warhol and is part of the Royal Collection.


  1. bruce madeiros


    Very interesting article . i know one thing if Charles become king I will be joining the republican party

  2. Monarchists habitually refuse to acknowledge the political and legal reality that the crown estates are state property – some even arguing that the royals “give” more than they receive in terms of tax revenue. In fact, the estates are under-taxed and are not “owned” by the Royal family.

    The present family occupy the British throne as a result of the 1701 Act of Settlement, which disinherited 50 or so people (whose descendants must now number in the thousands) in order to find someone prepared to support the Anglican church. The throne was settled upon the House of Hanover subject to a list of terms and conditions and the estates belonging to the office of the crown were therefore subject to certain terms and conditions.

    In 1701, and until George III was forced to negotiate with parliament the Civil List system, the crown estates were also used to fund certain aspects of the executive branch of government. They were part of the payroll of government expenditure. At no point, therefore, has any member of the reigning family “owned” these estates as their personal disposable property.

  3. John Dowdle

    A minor point of accuracy: have you used a picture of Elizabeth or her sister Margaret at the top of the article?
    A useful and informative article in delineating who owns what.

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