PARLIAMENTARY DEBATE
Sovereign Grant Bill - 14 September 2026 (Commons/Commons Chamber)

I beg to move, That the Bill be now read a Second time.

The Bill relates to the sovereign grant that Parliament has provided to support the official duties of the monarch and the work of the royal household. The Bill implements the conclusions of the recent royal trustees’ review of that sovereign grant. In doing so, it resets the grant level for the next financial year, giving effect to the commitment of successive Governments and the expectation of the royal household for a reduction in the level of funding following the completion of the Buckingham Palace reservicing programme, which keen Members will have heard about on the news this morning on the back of the discovery of some historical documents.

The Bill also makes targeted improvements to the statutory framework for this funding, introducing limited flexibilities to ensure that funding levels remain appropriate even in exceptional circumstances. This will make it easier to respond where funding would otherwise become inappropriately low or inappropriately high.

To support the monarch’s official duties, the sovereign grant funds the staff, official travel, property maintenance and essential services for the sovereign to fulfil their unique constitutional role. That role extends beyond ceremonial functions: it includes hosting heads of state, supporting diplomatic engagements, representing the United Kingdom overseas, and strengthening our relationships across the Commonwealth and the world. These activities support the UK’s interests, including trade, investment and security. At home, the grant supports the significant role of the sovereign and the wider royal household, from recognising charitable and voluntary service to bringing communities together across the United Kingdom.

Since 2012, the amount of the sovereign grant has been determined through a statutory framework established by Parliament in the Sovereign Grant Act 2011. That framework requires the annual grant amount to be calculated by reference to the previous year’s expenditure and a percentage of the profits of the Crown Estate—an independent public corporation whose net revenue profits are returned to the Exchequer. To ensure that funding levels remain appropriate, the 2011 Act requires the royal trustees—the Prime Minister, the Chancellor of the Exchequer and the Keeper of the Privy Purse—to conduct regular reviews.

The Minister is setting the scene incredibly well. He is right to underline that the British monarchy has clearly been a source of stability across the world, and to say that its unity remains irreplaceable in a world full of division. We acknowledge the ongoing need to review and adjust the sovereign grant, but does he agree that it is vital that the monarchy remains appropriately funded? When he sums up, can he assure us that the monarchy will be funded to effectively fulfil its duty to this country, the great United Kingdom of Great Britain and Northern Ireland?

I thank the hon. Gentleman for his tribute to the monarchy. His description of what he would like to see in the setting of the sovereign grant reflects exactly what has to take place. As I was just explaining, the three trustees are required to take into account the funding required to deliver the function that we all want our monarch to deliver.

There is what might be an important innovation in the text of this year’s sovereign grant annual report and accounts, which the Bill refers to and which the Minister is describing. Usually, the description of the sovereign’s role includes the term “defender of the faith”, but that term does not appear in this year’s report and accounts. Instead, the monarch is referred to as the

“Supreme Governor of the Church of England”.

That is good. The report also says that he

“protects the space for Faith within the multi-faith nation.”

That is an admirable ambition, but I invite the Minister to confirm that no alteration to the monarch’s role is implied in that change. If there were to be such an alteration, would it be debated properly in Parliament, rather than introduced quietly through these sorts of official reports?

The hon. Member has shown interest in this topic over many years, in a lot of different environments. This is a question of “and”, rather than “or”. As he says, the document spells out that His Majesty is the Supreme Governor of the Church of England. I encourage him to go on to the royal family’s website, where he will see the language about the King being the defender of the faith very prominently displayed. I hope that gives him the reassurance that he seeks.

We are extremely fortunate to have a monarchy, particularly this monarchy. Since the reign of George III, the profits from the Crown Estate have accrued to the Treasury; in return, the institution of the monarchy receives a grant, which we are debating today. Part of that is an annually determined proportion of the profits. However, for things other than exceptional expenditure, such as on Buckingham Palace, the institution presumably requires some sort of stability and certainty about the receipts necessary to carry out its functions. Is it logical for the grant to be a proportion of profits, which will inevitably vary year by year, because they are a commercial matter?

I think everybody in this House will agree with the thrust of what the right hon. Gentleman successfully argues. A royal household with an important role, both as the sovereign, and in maintaining an estate of grade I listed monuments, needs certainty about its income. It is not for me to defend the previous Government, but the 2011 Act provided two bases for funding. The first is the mechanism that he mentioned, relating to a proportion of the profits of the Crown Estate. The second is a proviso that there be no fall, from year to year, in the amount of the grant. That is to provide exactly the stability that he talks about. That is why we are taking forward this primary legislation, with that dual lock. The reduction this year is purely to take into account the bringing to an end of the Buckingham Palace 10-year repair project. The legislation then provides an ongoing commitment to the royal household and the monarch that the grant will remain at next year’s level, at least. I hope that offers the right hon. Gentleman reassurance.

As I was saying, a key point of context is that Parliament agreed a temporary uplift to the grant from 2017-18 to 2026-27 to fund the Buckingham Palace reservicing programme. That was a major 10-year investment to modernise ageing infrastructure, replace critical electrical and mechanical systems, and safeguard the long-term future of one of the nation’s most historic buildings. As that programme nears completion, it is time for the level of funding to be reassessed. Earlier this year, the then royal trustees completed the latest review and considered both the royal household’s projected expenditure and the Crown Estate’s projected revenues for the period from 2027 to 2032. The trustees concluded that with the Buckingham Palace reservicing programme nearing completion, the exceptional funding requirements that justified that temporary uplift no longer exist. They therefore recommended that the sovereign grant should fall from £137.9 million in 2026-27 to £99.9 million in 2027-28. That represents a reduction of almost £38 million, or more than a quarter.

At the same time, the trustees recognised that the royal household continues to face operational pressures in delivering what we all think of as crucial work. The recommended amount of funding will enable the household to address a maintenance backlog that was exacerbated by the pandemic, and to replace ageing digital infrastructure to strengthen cyber-security. The grant provided for by this Bill ensures value for money for taxpayers, and that the royal household can continue to discharge its crucial functions effectively.

This Bill delivers a fair and proportionate funding settlement. It reduces the amount of the sovereign grant, following the completion of a major capital programme; it improves the resilience and sustainability of the statutory framework established in 2011, while maintaining parliamentary oversight; and it ensures that the sovereign grant can continue to fulfil its core purpose, which is supporting the official duties of the monarch and maintaining the occupied royal palaces on behalf of the nation. On that basis, I commend this Bill to the House.

I call the shadow Minister.

I thank the Minister for his speech. This follows a recent debate on ways and means that his colleague the Exchequer Secretary had with my hon. Friend the Member for North West Norfolk (James Wild). I do not wish to repeat the points that were made on that occasion.

His Majesty’s official Opposition are supportive of this Bill. As the Minister laid out, the 2011 settlement has run its course; it did well for its time, but some aspects of it were due for reconsideration. As he said, the recent significant programme of upgrades to royal residences for public purposes has now reached its conclusion—I think this year is the final year of the additional funds—so it is timely for us to look for a change in structure. I thank the Minister’s colleague the Exchequer Secretary, because on the 11th of this month, he wrote in reply to questions from my colleague, answering questions about some of the points that we may get into in detailed consideration of the Bill.

One of the substantial changes of principle in this Bill is that the ongoing ratchets that were effectively put in place by the 2011 Act have essentially become a backstop of £99.9 million. In his answer to my right hon. Friend the Member for South West Wiltshire (Dr Murrison) about potential variability, the Minister has given us some confidence about the ability to plan; we know that there will not be an absolute reduction. However, questions remain about extraordinary circumstances in which the Treasury would be able to reduce the settlement in any one year. I think that the Liberal Democrats will be asking that question in reverse—about changes to the percentage that may occur—but those are matters that we can discuss in Committee.

His Majesty’s official Opposition recognise the tremendous work that His Majesty the King and the royal family do on behalf of our nation. We understand the power that that provides our nation with in our international relations, and the comfort that it gives to the people of this nation, and we support the Second Reading of this Bill.

My sense of patriotism does not come from a flag, an anthem or the royal family. Instead, my patriotism comes from things like our national health service; movements such as that of the Levellers, who were committed to popular sovereignty, extended suffrage, equality and religious tolerance; and how Britain stood up to and defeated the evil of fascism, both abroad during the second world war and at home in places like Cable Street, where Jewish residents, Irish dockers, trade unionists, socialists and others united to stop the British Union of Fascists movement from marching through Jewish neighbourhoods. That is the sort of patriotism I love.

I have the utmost respect for any citizen who believes that the royal family is a fundamental part of British life. I have no issues with that opinion; people are entitled to it, but it is simply not one that I share. There were many reasons why I joined the Labour party. One was to change—

Order. I am sure that the hon. Gentleman is expecting this, but it is important that he focuses his remarks on the Sovereign Grant Bill, and not wider issues to do with the monarchy, patriotism or why he joined the Labour party.

I will just put a red pen—a very dark red pen, obviously—through some of the comments that I wished to make. I will accelerate my remarks. It is clear that we are a nation of persistent inequality. I fully appreciate that the role of the royal family is way down the list of pressing issues that my Government have to deal with, but when looking at the intense suffering that millions of people are experiencing, I cannot help but feel that the sovereign grant money could and should be directed elsewhere, and not to a family worth an estimated £21 billion.

I call the Liberal Democrat spokesperson.

Order. I reiterate that we are going to stick to the scope of the Sovereign Grant Bill, which is very specifically only about the amount of the sovereign grant and how it is to be determined in future years. The hon. Gentleman will be aware that the grant goes to the King.

Order. Apologies, and I appreciate that I am now leaping to my feet with monotonous regularity, but it would be more appropriate for the amendment to be discussed in Committee than on Second Reading.

As I said during the ways and means debate last week, I welcome the Government’s decision to bring forward this legislation to make it possible for the sovereign grant to be reduced in future if necessary, and to return any unspent grant more quickly. I am grateful to the Exchequer Secretary for his letter this morning, which covered some of the points that I made in that debate. Today’s Bill feels like a missed opportunity, especially as a number of issues surrounding the grant remain to be addressed by the Government.

The first issue is the link between the grant and the profits of the Crown Estate. Members will know that the Crown Estate commands a massive £16 billion portfolio, owning much of our coastline and the corresponding seabed, but it is not the private property of the monarch, nor do the revenues from the estate belong to them. In fact the Crown Estate is quite separate from the monarchy, and operates to generate revenue for the Treasury. The implication of the current arrangement is that the monarch forgoes his profits from the Crown Estate in return for a payment of a percentage via the sovereign grant, yet all the profits are public funds. That is an odd form of indexation, and raises the question of why the grant is not based on the needs of the monarchy or its costs. It would have been better if the Bill broke the link to the Crown Estate and gave power to the royal trustees to decide the appropriate figure, based on need.

That raises the second question of how the grant should be set. I believe that it should be done on an annual basis, and that it is important for the funding of the monarchy to be transparent and open for MPs to debate. All public funds should rightly be open to scrutiny and parliamentary oversight. On numerous occasions I have tried to table questions about these issues, only to be told that this is not something for Parliament to discuss. That must change, and that is why I will support amendment 1.

The Bill calls for a substantial increase in the grant, and a rise from 12% of the Crown Estate profits to 20.5%. However, the royal family is smaller than it was in 2011, when the grant was first introduced, and the King and the Prince of Wales are said to favour a slimmed-down monarchy. It would appear that the anticipated increase to £99.9 million is not based on any assessment of need, and I should appreciate it if the Minister explained exactly how we have arrived at a figure that is 322% higher than it was when it was first introduced in 2012. Even allowing for inflation and the building maintenance programme that has been mentioned, the proposed grant is well over twice the real value of its starting point. As I mentioned during the ways and means debate, there are also some anomalies when we look at the monarch’s wider financial arrangements. Why, for example, is no account taken of the profits of the Duchy of Lancaster when the level of the sovereign grant is being set?

Ideally, Madam Deputy Speaker—I can see that you are very keen to bring me to book—we should have before us a Bill to ensure that the amount of the sovereign grant is appropriate to the relative needs of the monarch, and that Members of Parliament are not restricted to just approving a new percentage figure once every five years, via an arbitrary and unnecessary link to the Crown Estate. The Bill is, in my view, a missed opportunity to modernise the monarchy. I look forward to hearing the Minister’s comments.

I thank Members on both sides of the House for their contributions to the debate. I thank, in particular, my hon. Friend the Member for Poole (Neil Duncan-Jordan) for his engagement in the ways and means debate. I was glad to be able to write to him and to the Opposition in the intervening days to clarify a few points and, I hope, expand on some of the information that I gave during that debate.

Let me briefly touch on the headlines of the three things that the Bill is doing; I will then deal with the points that have been raised, and will wrap up in good time. First, the Bill resets the level of the sovereign grant to reflect the fact that the exceptional funding requirement associated with the Buckingham Palace reservicing programme is coming to an end. Secondly, it establishes a revised mechanism for calculating the grant in future years. Thirdly, it introduces limited powers to adjust the grant in exceptional circumstances—powers that have already been discussed in our proceedings—including circumstances in which funding would otherwise become inappropriately high. The Government believe that, taken together, these changes amount to a measured and sensible reform.

I now turn to some of the points raised. My hon. Friend the Member for Alloa and Grangemouth (Brian Leishman) made a valuable contribution. I would have enjoyed hearing more of it, but I understand that he had to keep within scope, and I will ensure that I do so too, Madam Deputy Speaker. His final point was that he does not think it is appropriate for this sum of £99.9 million to go to the royal family. It is worth clarifying that this grant is not for the family’s personal purposes, but to enable His Majesty the King and the working members of the royal family to carry out their official duties on behalf of all of us and of the country.

Turning to the Liberal Democrat spokesperson, the hon. Member for Carshalton and Wallington (Bobby Dean), I look forward to debating the proposed amendment in more detail in Committee. I thank the Liberal Democrats and the official Opposition for their support and engagement on the Bill.

If I understood my hon. Friend the Member for Poole correctly, his key question is: why is the grant set relative to the profits from the Crown Estate at 20.5%, rather than the needs of the household? I reassure him that the key thing is the needs of the household, rather than the figure of 20.5%. The way the trustees arrive at the relevant figure is via a bottom-up assessment of what is required to enable the royal household to carry out its duties on our behalf. It starts not with the relevant percentage of the Crown Estate profits, but instead with the specific needs and requirements of the monarchy.

On my hon. Friend’s specific point about the increase in the sovereign grant over recent years, he is right to point out that it is set to increase by more than inflation, but the trustees interrogated a number of reasons for that when the £99.9 million grant was determined. They include, for example, an £11.7 million addition for a 10-year programme to replace the gas heating systems at Buckingham Palace and Windsor Castle as part of the royal household’s clean energy transition; £4.3 million to modernise ageing digital infrastructure and strengthen cyber-security, and replace some legacy IT systems, some of which are over 20 years old; and £11.5 million for other cost increases such as on utilities, travel, housekeeping, equipment and professional services.

I do take and understand my hon. Friend’s point about inflation, but I point out that the grant will in effect be frozen—in cash terms—throughout the next five-year period. That goes to the point made by the right hon. Member for South West Wiltshire (Dr Murrison) about the stability of the royal household’s finances. It also goes some way to explaining why the Government do not think that coming back each year would be the most appropriate and efficient way to set the grant. For those seeking to deliver value for money for the taxpayer, particularly with long-term capital expenditure, via the sovereign grant, it is much easier to do so when it is possible to plan on a long-term basis.

The royal family have buildings, which are of some age, all over the country, and by their nature there is deterioration due to their size, the heating, the roofs, the way the buildings are and the length of time they have been in existence. Does the Minister agree that, when it comes to the responsibility of the royal family to look after these buildings, further consideration must be given to those that are showing years—maybe hundreds of years—of deterioration?

Yes, I agree with the hon. Member on that point. These grade I listed buildings and scheduled ancient monuments are a very significant part of our national story and, for many, of our national identity. On his point about the quality of the estate, I can tell the House that independent surveys have found that 52% of the estate was at the target condition in 2020, but that had fallen to 38% by 2025.

To conclude, the question before us is a practical one: do we wish to leave in place a framework that no longer properly reflects the end of the exceptional reservicing expenditure on the palace; or do we wish to put in place a revised framework that resets the grant, improves flexibility and preserves the ability of the grant to fulfil its core purpose? The Government’s view is that the right course is the latter. These measures are targeted, proportionate and deliver value for money for taxpayers. They improve the existing framework to the sovereign grant so that it continues to operate, I believe, as Parliament intended. I commend the Bill to the House.

Question put and agreed to.

Bill accordingly read a Second time; to stand committed to a Committee of the whole House (Order, this day).