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The queen’s property portfolio has been shattered by a coronavirus. Taxpayers will save her

Sir Michael Stevens, the Queen’s Treasurer, confirmed in a statement on Friday that the amount of the Sovereign Wealth subsidy, one of the royal family’s main sources of income, would not be affected by the expected decline in Crown Estate investment returns.
The sovereign grant is a lump sum payment by the government that covers business trips, staff costs and palace expenses. The grant is generated by Crown Estate, a real estate company that boasts a huge collection of farmland and first-class properties in central London. Most of the proceeds from the Crown mansion go to the state treasury, but 25% is paid by the Queen’s government in the form of a sovereign subsidy.

Last week, Crown Estate reported a record profit of £ 345 million ($ 440.2 million) for the year to March 2020, but warned that profits for the financial year to March 2021

would be “significantly reduced” by that amount due to the impact of the pandemic from her portfolio.

Much of central London was turned into a ghost town earlier this year as the blockade prevented millions of workers, shoppers and tourists. Activity began to pick up in the summer months, but new restrictions introduced this week to fight the second wave of the virus are expected to slow that recovery.

But the queen will not reduce her salaries, even if this year the income falls on the Crown mansion. The way the grant is calculated means that it will receive its share of £ 345 million – £ 86.3 million ($ 110 million) – in the year to March 2022. Its payment will also remain at that level in the coming years, even if the crown Profit property remains under pressure, as the law governing the grant does not allow it to fall into absolute terms.

“In the event of a reduction in Crown Estate’s profits, the Sovereign Grant is set at the same level as the previous year,” a Treasury spokesman told CNN Business. “The sovereign grant finances the official business of the monarchy and does not provide private income to any member of the royal family,” the spokesman said.

So less money from the Crown mansion will go to the treasury, but payments for the royal household will remain stable. Taxpayers will make up the difference.

The expected rescue program was broken by some economists on social networks.

“Madness. Landlords (including Crown Estate) have made risky investments: if returns can rise rapidly in good times, they must fall in bad times. But as a society we don’t seem to understand that,” tweeted Lori McFarlane. , a member of the UCL Institute for Innovation and Public Purpose.

The sovereign grant is reviewed every five years by the Prime Minister, the Minister of Finance and the Queen’s Treasurer. It has to be reviewed next year, which means, hypothetically, that the taxpayer subsidy can be reduced.

The news comes when British companies cut nearly 700,000 jobs between March and August, and more cuts are expected when government wage support is significantly reduced next month. The British are also facing the prospect of higher taxes to pay for rising government debt, which exceeded 2 trillion pounds ($ 2.5 trillion) for the first time last month.

However, the Royal Accounts will not be completely safe from the pandemic. The reduced growth of the Sovereign Grant will shave £ 20 million ($ 25.5 million) from the £ 369 million budget ($ 471.2 million) to renovate Buckingham Palace as the number of visitors to the palace and elsewhere declines. as Windsor Castle will result in an estimated revenue loss of £ 15 million ($ 19 million) over the next three years.

Stevens, the cashier, said the royal household “has no intention” of asking for additional funding and “will seek to manage the impact through our own efforts and efficiency”.

The financial report released on Friday shows that the costs covered by the Sovereign Grant, including salaries, property maintenance and travel expenses, rose 3.6% to £ 69.4 million (USD 88.6 million). ) in the year to March 2020. For comparison, consumer price inflation is between 1.5% and 2% for the same period.

The pandemic hit highlights “the weaknesses of the funding system,” said journalist David McClure, who is currently producing a documentary on royal finances. The real problem with the Sovereign Grant, he said, is that there are no incentives to encourage spending cuts.

“There seems to be a link between requirements and revenue,” he added.

“Max Foster contributed to this story.”

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