Economics of the Monarchy
By Chris Fashek | October 27, 2022
The last decade has been a tumultuous time for the United Kingdom. In the aftermath of the shocking Brexit result and the subsequent resignation of Prime Minister David Cameron, both the political climate and economic well-being of the country has been rocky at best. Economically, the UK has been hit hard by a cost of living crisis. Sky high consumer prices have squeezed household budgets, with the Bank of England expecting a recession this year. While the official cost of the Queen’s funeral has not been disclosed, some estimates have calculated it to be more than $6 billion. In these times, many have come to question the role of the monarchy in modern day Britain. This article seeks to examine the economic impact of the British monarchy.
Critics of the monarchy often point to the inequitable nature of taxpayer money funding one of the richest families in the world. Known as the Sovereign Grant, British taxpayers pay an annual payment to the crown, which funds the Royal Family’s expenditures and royal duties. In 2021, the Sovereign Grant came out to £86 million. Property maintenance of the Crown Estate made up the largest area of spending, with other spending going to travel expenses and payroll of employees. However, security and police presence to protect the Royal Family is not paid for by the Sovereign Grant, but instead directly from military and police budgets. The Queen’s funeral, alone, required 10,000 police officers in one day. When security and other costs are factored in, the true taxpayer burden is much greater. Republic, an anti-monarchy political group, estimated the true annual cost of the monarchy to be £345 million. In a time where many British households are struggling to make ends meet, this is a tough bill to foot, especially to a family that is estimated to be worth £68 billion.
While the taxpayer burden of the monarchy is indeed steep, many royalists are quick to point out that the monarchy is the source of large revenue streams to the overall British economy. The Crown Estate, an independent commercial business that reports directly to the British treasury, brought in $350 million in 2021. Properties in its control include the Royal Ascot race grounds, Windsor Castle, and Regent Street in central London. Royalists also argue that the Crown indirectly boosts the economy by increasing retail spending and boosting tourism. The birth of Prince George in 2013 was estimated to have generated $280 million in retail sales, mainly in the form of souvenirs and spending from celebrations. Tourism wise, the Royal Family remains a central attraction to visitors. The London boroughs of Kensington and Chelsea, where Buckingham Palace is located, is the source of almost $1.8 billion of retail spending. Brand Finance, a consulting firm, estimated that the monarchy’s net contribution to the British economy is £1.8 billion.
The general consensus surrounding the monarchy is that it is a net positive source of revenue for the UK economy. However, net profit is of course not the only metric. Many argue that the monarchy is inequitable and anti-democratic and abolishing the monarchy would be a step forwards in modernizing the UK. Ultimately, the monarchy question will always remain. It is up to the Royal Family to maintain a favorable image in the eyes of the British public.
Edited by Maggie Reddington