There is more good financial news for the Queen and her eventual successor, among the few beneficiaries of last week’s spending review by George Osborne which cut billions off public spending.
The royals will indirectly benefit from the £200m extra that the Government will invest in offshore wind farms and in the port facilities needed to handle them. The seabed within Britain’s territorial waters, which extend almost 14 miles from the coast, is owned by the Crown Estate. Operators pay rent to the Crown Estate for the right to run cables along the seabed, and they also pay out a percentage of the profit from the electricity generated.
For more than two centuries, income from the Crown Estate has gone to the Exchequer, under a deal reached between Parliament and George III. But during his announcement of the Spending Review, Mr Osborne said the royal family is to receive a proportion of the income from the estate. The civil list, which has been Parliament’s way of financing the royal family up to now, is to be frozen, and then abolished outright in 2013.
The number of turbines operating around Britain’s coastline is scheduled to grow from 436 at present to around 6,400 in 2020, creating thousands of new jobs and generating tens of millions of extra income for the Crown Estate.
Prince Charles is a well-known campaigner for offshore wind turbines and other forms of clean energy – although he strongly disapproves of wind turbines sited in beauty spots on land, describing these as a “horrendous blot on the landscape”. He refused to have them built on his Highgrove estate.
The estate owns about £6bn worth of land and other assets, bringing in last year a profit of £210m. The development of wind turbines could more than double that annual figure.
The new arrangement means that, for the first time since Parliament bailed out George III’s debts, the monarchy will not have to negotiate with the government over its expenditure, as it will have an independent source of income more than adequate to cover its costs. Buckingham Palace estimates that it costs £38.2m a year to run the monarchy (a figure that does not include security and certain other costs). If operations are to be maintained at that level, it will need to receive something like 15 per cent of the income from the Crown Estate.
The Treasury says that 15 per cent is an “indicative figure” of how the settlement might work, and that no final decision has been made. Once the figure is agreed, the monarchy will have an independence from parliamentary oversight that it has not enjoyed for centuries.
Mr Osborne declared last week that his intention was to settle the question of royal finances once and for all. A Buckingham Palace spokes-man said: “The details have not yet been finalised with the Treasury.”
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