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00539.txt
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$Unique_ID{bob00539}
$Pretitle{}
$Title{United Kingdom
Royal Income and Expenditure}
$Subtitle{}
$Author{Embassy of the United Kingdom, Washington DC}
$Affiliation{Embassy of the United Kingdom, Washington DC}
$Subject{royal
civil
list
expenditure
income
palace
family
expenses
official
parliament
see
tables
}
$Date{1990}
$Log{See Table 1.*0053901.tab
}
Title: United Kingdom
Book: The Monarchy in Britain
Author: Embassy of the United Kingdom, Washington DC
Affiliation: Embassy of the United Kingdom, Washington DC
Date: 1990
Royal Income and Expenditure
About 85 per cent of the expenditure arising from the official duties of
the royal family is met by public departments - including, for example, the
costs of the Royal Yacht Britannia, the Queen's Flight, travel by train, the
upkeep of the occupied royal palaces, and State visits overseas.
The remainder of the Queen's expenditure is financed from three sources.
First, the Queen's Civil List (see below), a payment from public funds
approved by Parliament, finances the costs of running the Royal Household and
other expenses incurred in the course of her official duties as head of State.
Secondly, the Privy Purse, financed from the revenues of the Duchy of
Lancaster, meets the cost of expenditure, not met by the Civil List, which is
incurred by the Queen as a result of her position as Sovereign. Finally, the
Queen's personal expenditure as a private individual is met from her own
personal resources.
The royal palaces, together with the crown jewels and the royal
collections of art, stamps and books, are vested in the Queen as Sovereign but
cannot be disposed of - they must be passed on to her successor. They are
therefore not her personal property. There are also other items - for example,
of jewellery - which the Queen regards as heirlooms and not at her free
personal disposal.
The Civil List
The basic Civil List is paid automatically by the Treasury from the
Consolidated Fund under an Act of Parliament, normally passed within six
months of the beginning of a reign, which continues in force for six months
after the death of the Sovereign (although a revision may take place in the
course of a reign). In exchange, the Sovereign surrenders to the Exchequer the
revenue from the Crown Estate (35 million Pounds in 1987-88) and certain
hereditary revenues.
Until 1760 the Sovereign had to provide for payment of all government
expenses, including the salaries of judges, ambassadors, civil servants, and
the expenses of the royal palaces and households, doing so from hereditary
revenues, mainly income from Crown lands, and income from some customs duties,
certain assigned taxes and postal revenues granted to the monarch by
Parliament. The income from these sources eventually proved inadequate and,
when King George III became King, he turned over to the Government most of
the hereditary revenue and received in return an annual grant (Civil List)
from which he continued to pay the royal expenditure of a personal character
and also the salaries of civil servants, judges and ambassadors, and certain
pensions. These extraneous charges were removed from the Civil List in 1830.
Today, the Civil List covers expenditure on the salaries and expenses of
the Royal Household (staff of the Household are generally paid and pensioned
on a basis analogous to that in the Civil Service) and royal bounty, alms and
special services. Just under three-quarters of the Civil List provision is
required to meet salaries costs.
Because of the rising costs of running the Royal Household in times of
inflation, and despite every effort to make economies, it became impractical
to settle the amount of the Civil List by legislation at relatively infrequent
intervals. Accordingly, the Civil List Act 1975 established a system whereby
payments additional to those provided under the Civil List Act 1972 could be
made, subject to annual authorisation by Parliament, together with other
departmental expenditure.
Under this Act, the Treasury makes annual payments from money provided by
Parliament to supplement the Queen's Civil List, annuities to certain named
members of the royal family (see below), contributions towards the expenses of
other members of the royal family, and Civil List pensions. The payments are
by way of grant-in-aid to the Royal Trustees (the Prime Minister, the
Chancellor of the Exchequer and the Keeper of the Privy Purse) and are subject
to the normal parliamentary `supply' procedure for the approval of government
expenditure. The Royal Trustees generally review the working of the Civil List
system at least once every ten years, and report to Parliament.
This change in the machinery for determining Civil List payments was
accompanied by an offer from the Queen, which the Government accepted, to pay
from 1976 onwards an annual contribution equivalent to the provision made from
public funds towards the official expenses of members of the royal family for
whom Parliament had made no specific provision (at present the Duke of
Gloucester, the Duke of Kent and Princess Alexandra).
Provision for Members of the Royal Family
The amounts payable from central funds under the Civil List Acts to
members of the royal family in order to meet their official expenses incurred
in carrying out public duties are as follows in the calendar year 1988:
[See Table 1.: Royal Allowances]
The 1972 Act provided that the younger sons of the Queen (Prince Andrew
and Prince Edward) should receive 20,000 Pounds annually on reaching the age
of 18, and before marriage. This would be increased to 50,000 Pounds after
marriage.
The Act also provides that a widow of the Prince of Wales would be
entitled to an allowance of 60,000 Pounds a year and that the annual amount
payable to a future wife of a younger son of the Queen in the event of her
surviving her husband would be 20,000 Pounds. Any of these payments may be
supplemented by the Royal Trustees under the provisions of the 1975 Act.
Parliament makes no special provision for the Prince of Wales, who is
entitled, as Duke of Cornwall, to the net revenues of the estate of the Duchy
of Cornwall - about 51,400 hectares (127,000 acres) in south-west England and
London. At the age of 21 he became entitled to these revenues but voluntarily
undertook to surrender half to the Exchequer. After his marriage in July 1981,
by agreement with the Government of the day, the voluntary surrender was
reduced to a quarter.
Taxation
As part of the royal prerogative the Queen does not pay tax - either on
her private wealth and income, or on the Queen's Civil List - unless
Parliament decides otherwise. This immunity extends to income from the Duchy
of Lancaster.
The income and property of the Duchy of Cornwall are similarly exempt
from income tax, capital gains tax and capital transfer tax. Any other income
or property of the Prince of Wales is taxed in the ordinary way as though it
were his total income or property.
The Civil List annuities payable to members of the royal family are
exempt from income tax, either wholly or in part, only to the extent that they
are used to meet official expenses incurred in carrying out public duties.
Payments by the Royal Trustees to cover the official expenses of other
members of the royal family, in accordance with normal taxation practice, do
not rank as income for tax purposes.
Departmental Expenditure
About 85 per cent of all expenditure arising from the official duties of
the royal family is met by government departments. The costs of the Royal
Yacht Britannia and of the Queen's Flight of aircraft (see p 25) are met by
the Ministry of Defence. Travel by train on official business by the royal
family and staff of the Royal Household is paid for by the Department of the
Environment. Other items of expenditure met by government departments include
the cost of official travel overseas and the provis