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Long before Charles III became King, people close to him were trailing the prospect of a “slimmed-down, modernised” British monarchy once he acceded to the throne.
It was something of an about turn, therefore, when the Treasury announced last month that far from cutting the royal cloth to match the times, the monarchy would instead be getting a pay rise of about 45 per cent.
The increase in public funding from £86.3mn this year and next to £124.8mn in 2025-26 and £126mn in 2026-27, is linked to one of the more contentious sources of royal income.
This is derived from the ownership of the seabed up to 12 nautical miles from the coast, which was ceded in 1964 to the Crown Estate, which controls the monarchy’s legacy portfolio of assets.
A boom in revenues from offshore wind projects will deliver the estate more than £8bn up to 2031, from which the royal household receives a percentage of profits in an annual payment known as the sovereign grant.
In what was seen as a smart move, heading off potential controversy at the start of his reign, the King said in January that the monarchy would forgo its share in this renewable energy bonanza for “the wider public good”.
But even after trustees of the sovereign grant — prime minister Rishi Sunak, chancellor Jeremy Hunt and treasurer to the King Sir Michael Stevens — revised down the percentage of Crown Estate profits accruing to the monarchy from 25 to 12 per cent, the King’s household income will still shoot up, according to Treasury forecasts.
For republicans, (around one in four Britons according to recent polling) news of this deal has proved a lightning rod.
“In 2025, the King will receive an eye-watering 45 per cent rise. This is at a time when nurses are receiving 5 per cent and other key public workers are still fighting for a fair wage,” the campaign group Labour for a Republic wrote in a letter to opposition Labour leader Sir Keir Starmer.
“We believe that this award is morally unjustifiable,” it said, urging Starmer to revisit the way the monarchy is financed and restore oversight by parliament should he become prime minister after general election next year.
Between 1760 (when George III surrendered hereditary revenues from the Crown Estate in return for a fixed annual payment) and 2012, the monarchy was financed by a discretionary amount decided by government and approved by MPs.
Former prime minister David Cameron changed the formula so that public funding of the royal household came instead from 15 per cent of the profits of the Crown Estate (all of which previously accrued to the Treasury).
The government also guaranteed that the grant would never be lower than the year before by agreeing to make up the difference should the estate’s profits go down.
The percentage in the formula was revised up to 25 per cent in 2017 by former chancellor George Osborne to finance the renovation of Buckingham Palace.
Since then, the Crown Estate, has begun to reap the dividends of a boom in renewable energy, thanks to unprecedented interest including from oil majors in the auction of seabed licenses for wind farms launched in 2021.
The corporation’s profits are forecast to rise as a result from £442.6mn this year to £1.04bn in 2023-4, according to the Treasury.
While funding for the monarchy would have been much higher as a result of this boom had the government stuck to the previous 25 per cent formula, it is still on an upward trajectory that some commentators believe is incompatible with the public mood.
“He was going to be a modernising monarch and cut back on extravagance,” said royal historian and writer Clive Irving, who argued that the long-term fate of the monarchy depends on it becoming accountable like any other state institution. “There is no sign of anything like that happening,” he said.
Buckingham Palace declined to comment. A spokesperson for the Treasury said the sovereign grant had been largely unchanged since 2020, and the projected increases would “provide the remainder of the amount agreed in 2016 for Buckingham Palace Reservicing”.
Once Buckingham Place reservicing is complete, the government will set the grant “to an appropriate lower level,” the spokesperson said.
In addition to the sovereign grant, the King’s income from the Royal Collection Trust, which manages one of the largest art collections in the world, is also set to rise from £10mn this year to nearly £16mn in coming years, according to the Treasury.
Meanwhile, the king and his heir Prince William receive further private income from the estates of the Duchies of Lancaster and Cornwall. The Duchy of Lancaster recently announced annual profits up 9 per cent from £24mn to £26.3mn. The Duchy of Cornwall made a record surplus of £24mn.
While there has been little public uproar about changes to the sovereign grant, the subject of royal finances is nevertheless becoming tetchy.
Support for the monarchy in the UK fell to its lowest level ever in April, with only 29 per cent of those surveyed saying they thought the monarchy was “very important”, according to the National Centre for Social Research. A separate poll for the Daily Mail in May, found 73 per cent of those surveyed thought Charles must modernise the monarchy if it is to survive.
“They are more vulnerable on finances than anything else at a time when families are struggling to put food on the table,” said Norman Baker, a former Liberal Democrat minister and author of And what do you do?, which examines royal finances.
Baker has long argued the UK should trim its royalty to a size more like its European counterparts. The Swedish royal family, for example, received £11.5mn in public funding in 2021.
But, he and other advocates of reform are doubtful it will come soon. For one, neither of the main political parties appear ready to rock the boat ahead of elections next year.
But the demand for change is growing. “It’s a door that can be pushed on,” said Labour MP Clive Lewis.