UK gov slashes King Charles' funding

By Al Mayadeen English
Source: News websites
20 Jul 2023 21:27

The UK government has cut the rate of public funding to King Charles III by more than half due to the monarch's substantial profits from offshore wind projects on the Crown Estate.

Britain’s King Charles III at the Palace of Westminster in London on 14 September 2022. (AFP)

The UK government has announced a significant reduction in the rate of public funding allocated to King Charles III due to the monarch's burgeoning profits from offshore wind projects on the Crown Estate, Politico reported.

The Sovereign Grant, an annual payment made by the government to the royal household, will be more than halved, plummeting from 25 percent of Crown Estate net profits to just 12 percent for the fiscal year 2024/25.

This alteration in the funding formula implies that the monarch and his household will witness a substantial decrease of nearly $385 million over the next three years compared to what they would have received under the previous rate.

The UK Treasury has estimated that the adjusted funding rate will result in a reduction of $30 million in the Sovereign Grant for the fiscal year 2024/25 and a decrease of over $167 million for both 2025 and 2026.

The cut in funding was reportedly driven by the "unexpected significant increase in the Crown Estate's net profits from offshore wind developments." The Crown Estate, which manages a diverse range of properties and assets on behalf of the reigning monarch, experienced a boost in profits primarily due to the revenues generated from electricity generators. Last year's rise in electricity costs, resulting from increased gas prices due to the war in Ukraine, further contributed to the profit surge.

The decision to cut the rate of the Sovereign Grant was taken by the royal trustees, including Chancellor Jeremy Hunt, Prime Minister Rishi Sunak, and Michael Stevens, the keeper of the privy purse, responsible for managing the royal household's finances.

The UK Treasury has estimated that the adjusted funding rate will result in a reduction of £24 million in the Sovereign Grant for the fiscal year 2024/25 and a decrease of over £130 million for both 2025 and 2026.

Despite the reduction in funding, a portion of the grant will still be allocated to renovate Buckingham Palace itself. The refurbishment works aim to mitigate "a serious risk of fire, flood, and damage to the building," according to statements from the Treasury.

Historically, the Crown Estate's profits have been relinquished to benefit the British public, while the government provided a fraction of those profits to support the monarch in carrying out official duties. However, the surge in offshore wind projects and their subsequent profits has prompted the government to reconsider the funding model to strike a balance between the Crown's responsibilities and public needs.

The reduced Sovereign Grant signifies a significant shift in the financial dynamics between the monarchy and the government and reflects the evolving landscape of the UK's renewable energy sector. As King Charles III continues his reign, the nation will closely observe how these changes impact the monarchy's role and its financial interactions with the British public.

Yesterday, it was reported by the New York Times that King Charles III was garnering significant gains from the rent in the Duchy of Lancaster.

Charles received a staggering $34.3 million from his extensive property holdings known as the Duchy of Lancaster, which he inherited upon the death of his mother, Queen Elizabeth II.

Spanning an impressive 45,000 acres, roughly the size of Washington D.C, the Duchy generates substantial rental income each year without being subject to corporation taxes, unlike most businesses in Britain.

The Duchy of Lancaster, a real estate portfolio valued at $1 billion, is dedicated to generating revenue for the reigning monarch. The Duchy serves as a primary source of private income for the royal family, supporting them alongside the taxpayer-funded Sovereign Grant, which by itself overs most official royal expenses. The sovereign grant and the Ducjies serve as a fraction of the royal family's fortune which is estimated to be around $28 billion which includes personal wealth, and real estate assets under the Crown Estate.