The Monarch, the Crown Estate, and Gary Lineker

Dr Huw Evans, academic lawyer, Cardiff Metropolitan University

In this article I look at the relationship between Crown Estate profits and the amount of sovereign grant the monarch receives to meet ‘Royal Household’ expenses for official duties.

For reasons of highlighting the absurdity with current arrangements, the profitability of Gary Lineker is included in the discussion.

Performance and reward

There is probably general agreement that performance is one criterion that should be considered when setting the amount of renumeration that a person receives. It might not be the only one – experience, qualifications, and market demand might be others – but such familiar things as performance related pay or bonuses reflect this determinant.

While there may be arguments about how such arrangements are applied there is a defensible logic that links performance and reward.

That same logic  would not apply if reward for one person (A) is linked to the economic performance of another person (B), and B’s performance is entirely separate from what A does.

For example, no-one could seriously argue that my pay increase should be fixed by reference to Gary Lineker’s profitability, a person with whom I have no connection. It would be bonkers to do so, of course.

Sovereign grant and the Crown Estate

But despite being bonkers, that is exactly what happens in the situation where we substitute ‘the monarch’ for ’A’ and ‘the Crown Estate’ for ‘B’.

Under the Sovereign Grant Act 2011 sovereign grant replaced the civil list as the mechanism for state support for the monarch; and economic performance of the Crown Estate is the central factor for determining the amount of grant.

‘Hold on’, you say, and then ask: ‘Surely there is a link between what the monarch does and the Crown Estate profits? The clue is in the words ‘monarch’ and ‘Crown’’.

Superficially this may appear so, but this is an illusion.

Yes, the monarch owns the property in the Crown Estate during his or her reign – the monarch is said to own it ‘in right of the Crown’ – but it is not the monarch’s private property and he or she does not manage it, or otherwise make decisions about it.

This arrangement began in 1760 when in return for a fixed annual amount from Parliament, George III gave up management of Crown lands, with exceptions such as the Duchies of Cornwall and Lancaster.

Crown Estate Act 1961

The organisation that developed to administer these lands became the Crown Estate. The Crown Estate Act 1961  formalised arrangements and established the Crown Estate on a statutory footing. That act is still the governing legislation and under it Commissioners are appointed to manage the Crown Estate.

The  Crown Estate  describes itself as a ‘modern day independent commercial organisation’. Its profits go to the Treasury.

The Treasury decides the amount of sovereign grant for the monarch with reference to the Crown Estate net profits.

What the monarch does or does not do has no impact on the economic performance of the Crown Estate.

Crown Estate Bill

There is a Crown Estate Bill  currently before the UK Parliament; it will amend the 1961 Act, not replace it.

According to the  bill’s explanatory notes, it will remove limitations on the Crown Estate’s ability to borrow ‘which would otherwise restrict its long-term viability’. The bill also ‘aims to ensure that the Crown Estate remains resilient and is better equipped to fulfil its statutory function’.

The intent, clearly, is to make the Crown Estate as commercially effective as possible. And increased profitability means increased sovereign grant.

Putting argument about Crown Estate devolution aside, most people in Wales would probably agree that profits made should go to the public purse and be used for public benefit.

That is one position, but agreeing to the monarch’s annual sovereign grant being linked to Crown Estate profitability is another matter altogether.

Illusion of current arrangements

The link between Crown Estate profits and sovereign grant was questioned during current consideration of the Crown Estate Bill.

Lord Turnbull called it  ‘a too-clever-by-half ruse by the[n] Chancellor [George Osborne]’ to ‘pull the wool over the eyes of Parliament and the public by implying that the monarchy was meeting its own operating costs from its own resources rather than drawing on taxpayer funds from the Exchequer.’

This insight identifies the dishonesty with arrangements for fixing sovereign grant. As previously mentioned, there is a superficial link between performance and remuneration; because the monarch does own Crown lands, albeit ‘in right of the Crown’.

But because of what is implied, the monarch’s detachment from Crown Estate economic performance is conveniently masked – and, it seems, deliberately so.

And because it is masked the amount of sovereign grant is not seriously examined. For example, the grant is expected to rise to around £130 million in 2024-25 due to increased Crown Estate profitability – the amount of grant for  2012-13 was £40 million.

Crown Estate economic performance and sovereign grant calculation should be completely separated. They are unrelated.

This would enable better (and even meaningful) scrutiny of monarch performance and needs before deciding the amount of grant.

A more honest approach would be to amend the Sovereign Grant Act 2011 to link the amount of grant to Gary Lineker’s net profits, in place of the Crown Estate’s.

It would be nonsense, but no more nonsensical than the current position. And, unlike now, it would make the nonsense obvious.

As to more sensible remedial options, two are offered for Wales. The less radical option is to devolve the Crown Estate as it is in Scotland. Scottish Crown Estate profits are not included when calculating sovereign grant. There could be something similar for Wales.

The more radical option would be to abolish the office of monarch and retitle the Crown Estate as the Public (or People’s) Estate. There would be savings as no profits would be diverted to pay sovereign grant and the former Crown Estate in Wales could more obviously be managed for the public good.