MP calls for investigation of all property & land owned by Royal Family

marksimonbrown mark at
Thu Sep 25 10:21:20 BST 2008

Paul Flynn MP, a Labour member of Parliament's Public Administration
Committee, called for a "root-and- branch investigation" of all
property and land owned by the Royal Family. (extract from following
article about Queen's plea for more cash being rejected by the Govt,
in today's Independent):

Rejected: Queen's plea for more cash
Exclusive: Government refuses to increase Civil List despite £6.5m
black hole in royal accounts
by Robert Verkaik, Law Editor
The Independent
Thursday, 25 September 2008 

The Queen and the Government are locked in a secret dispute over royal
demands for increased public funding to meet the growing expense of
the monarchy.

Palace aides have told ministers they need extra money to offset the
cost of maintaining the Royal Estate of palaces and pay for increased
fuel, food and staffing costs. But the Government is refusing to
increase the £15m it pays for the upkeep of the Queen's occupied
palaces and is fending off demands for a large rise in the £7.9m Civil
List which pays for the monarch's public functions. Ministers argue
that, in the present economic climate, Whitehall budgets are already
overstretched. Royal aides counter that Parliament has a
constitutional duty to ensure the Queen is financially secure.

An investigation into the royal accounts by The Independent, with the
accountants Baker Tilly, has revealed that – by 2011 – the Queen will
not be able to balance her books as the escalating cost of maintaining
the Royal Household will be more than double the £7.9m allocated by
Parliament. This year's palace accounts already show Civil List
expenditure will reach £14.4m – £6.5m more than the Government has
agreed to pay the Queen each year.

The dispute can only be settled if either the Government agrees to
give the Queen more money or the Royal Family scales back its public
spending. All that the Treasury will say on the subject is that an
announcement on the Civil List will be made "in due course".

Palace aides, who are now pessimistic about a state bailout, claim the
royal finances have been ravaged by inflation. Without more funds,
Buckingham Palace insists, the Queen will no longer be able to pay for
the upkeep of her palaces, which her aides claim require £32m of
refurbishment and maintenance in the next 10 years.

A Palace source said: "We have spent a lot of time convincing the
Department for Culture Media and Sport of the merits of our case but I
am not convinced they are listening very carefully to our arguments.
It is a major disappointment." The Palace believes that competing
interest from the Olympics budget has helped to close ministers' minds
to releasing more cash.

There is strong public and parliamentary pressure to rein in the
growing cost of the Royal Family, which stood at £40m overall last
year and includes maintaining the Royal Household, the upkeep of the
palaces and the Royal Family's travel bill. That is £12m more than in
2002, when the Palace first published detailed accounts of its
finances. Some MPs suspect that members of the Royal Family,
principally the Prince of Wales and the Duke of York, have been
profligate with taxpayers' money and want the royal accounts publicly
audited in the same way as government departments.

Paul Flynn MP, a Labour member of Parliament's Public Administration
Committee, called for a "root-and- branch investigation" of all
property and land owned by the Royal Family.

Included in the list of palace demands is a more generous tax
treatment, specifically a call for a VAT exemption on the payment of
services rendered to the Queen. "Government departments get VAT
exemptions on services, why shouldn't we?," said an aide.

Negotiations are about to enter a critical phase as the Government
prepares to review the Civil List. The Civil List was last increased
to £7.9m in 1990 under a private agreement with John Major's
government in what was recognised, at the time, as a very generous

Under the Blair government it was reviewed again in 2000, but
ministers balked at giving more taxpayers' cash to the Royal Family
even though it was clear inflation had considerably reduced the real
value of the Civil List. It is due for renewal before 2010.

According to palace accounts, the Queen had built up a reserve of £35m
in 2000. But as palace officials made further "draw-downs" to meet the
increasing cost of living and the impact of inflation, the reserve was
reduced to £26m last year. It is estimated to fall below £20m this
year and will be wiped out completely before 2011.

While palace maintenance represents the biggest call on public
expenditure, the Queen is also responsible for a growing salary and
pensions bill that has increased to £9.1m, up £2m in four years. Her
finances have also been hit by rising fuel costs and the crash in the
stock market, where some of the Civil List reserve has been invested.

The harsh economic realities were recently brought home to the Queen
when she was forced to sell land at the Royal Garden Hotel,
Kensington, to raise £2.5m to pay for emergency repairs and
refurbishments, including a staff accommodation block in the Royal
Mews area of Buckingham Palace.

Mark Harwood, head of UK risk and corporate governance with Baker
Tilly, concluded: "Future funding will need to be at a higher level
and will probably need to increase year on year, rather than the
policy under John Major of fixing a higher List, allowing surpluses in
earlier years to be invested to cover deficits in later years."

Explainer: The Queen's income

The queen's wealth can be divided into the income she receives from
the Government and earnings from her estates and investments. The
public cost is partly funded by the Civil List, while further
taxpayers' money is spent on the upkeep of the occupied palaces and
the Royal Family's travel on state business. Prince Philip receives a
grant of £359,000 for his state role as consort to the Queen.

The Queen continues to generate income through the privately owned
46,000-acre estates of the Duchy of Lancaster. This year it rose from
more than £11.7m to £12.6m. This helps pay for her private estates and
some expenses for the junior royals.

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