Thread: $460M Repair Bill for Buckingham Palace Triggers Monarchy Debate in Britain

LONDON —
Buckingham Palace in London, the main residence of Queen Elizabeth, is in desperate need of renovation. The work will cost hundreds of millions of dollars, and the government plans to use taxpayer money. That decision has triggered an angry response from critics, who say the monarchy should pay its own bills at a time of national austerity.

The daily Changing of the Guard at Buckingham Palace draws thousands of tourists, who scramble and strain to get the best photograph of the iconic building and maybe even a glimpse of Queen Elizabeth herself.

From the outside, the roughly 300-year-old palace looks fit for the world’s longest serving monarch.

But behind the facade, palace officials say it is falling apart. The boilers are more than 30 years old, and the estimated 160 kilometers of electric cables were installed in the 1960s. The pipework is made of lead and cast iron. All of it needs replacing, at an estimated cost of around half a billion dollars.

The British government has approved the use of public money. But many lawmakers, like the Scottish National Party’s Paul Monaghan, question why the people should pay.

“Estimates suggest that the total net value of the monarchy is about 84 billion U.S. dollars," he said. "The personal wealth of the queen is about 650 million U.S. dollars. So I think that it should be the monarchy, not the people.”

The government argues the upkeep of Buckingham Palace is vital to Britain itself.

Visiting heads of state are usually given a full ceremonial welcome here by the queen. Earlier this month, she hosted Colombia’s President Juan Manuel Santos.

Buckingham Palace also draws hundreds of thousands of tourists. Many visitors told VOA they were surprised to hear of the problems at the palace.

“Given austerity measures going throughout the country, I would say that putting that on taxpayers and the people is tough,” one man said.

“I feel like it should definitely come from both sides," said another tourist. "As far as the government paying it, I feel like in return it gets a lot. Tourists are going to come and it is something that tourists are always going to want to come and see.”

The work will be done in stages, so the Queen will not have to move out. And with 775 rooms, there should be somewhere for her to escape the construction noise.

Officials say if the planned work goes ahead, the palace won't need another renovation until 2067. By that time Prince William, second in line to the throne, would be 85 years old.

$460M Repair Bill for Buckingham Palace Triggers Monarchy Debate in Britain

Forbes Welcome

But The Queen Is Paying For The £370 Million Buckingham Palace Repairs Already


Tim Worstall , CONTRIBUTOR



Not understanding the economics of a matter is a dangerous place to start from if one then wants to talk about the economics of that matter. And so it is with this whining about the cost of repairs to Buckingham Palace and the demand that the Queen should be paying some of this cost, not taxpayers. The misunderstanding here is that the Queen will be paying for these repairs. Thus the demand that she does so is ever so slightly skew whiff, isn’t it? What people are forgetting about is the Crown Estate.

We’ve got the Labour Shadow Chancellor chuntering on about it:

The Queen should pay for the £370million refurbishment of Buckingham Palace, Labour demanded today.

Shadow Chancellor John McDonnell, a lifelong Republican, said the Palace must open its doors to more tourists if the taxpayer continues footing the bill.

It’s his colleague who manages to half get the point:

Clive Lewis, the shadow business secretary, told ITV’s Peston on Sunday this morning that he also believed the Queen “should contribute quite a bit” to the renovation fee.

He pointed out that Brenda is actually quite rich so, well, therefore she should pay more. And the ignorant among the populace are mobilising too:

Thousands of people have signed an online petition calling for Queen Elizabeth II to pay nearly 370 million pounds for repairs to Buckingham Palace from her own pocket instead of resorting to taxpayer funds.

That petition is here and this is the crucial part of the demand:

Buckingham Palace is about to be given a £369m refurbishment. Tax payers are paying for it. The Crown and its estates should be made to fund its own renovations.

And this is the little bit that is needed to understand why this is such an ignorant demand:

The work is being funded through an increase in the Sovereign Grant – the money given to the Queen which is based on profits of the Crown Estate.

So, just to walk through it. The Queen is indeed rich. However, her personal wealth is not all that large. Oh, sure, we’d all like to be that rich and so on but she’s not up there in the billionaire lists that this magazine compiles. The larger estimates of her wealth include the Crown Estate. And that is a big chunk of money. But it also doesn’t belong to Mrs. E Windsor. It belongs to the Monarch. Property within the Crown Estate can be sold, bought, mortgaged and all the usual stuff but the money cannot then flow out to said Mrs. E. Windsor.

Sure, it’s an odd arrangement and we probably wouldn’t design it this way if we were starting with a blank page but this is the way it works. So, that vast pile of billions produces a profit each year. A very healthy one as the Crown Estate accounts show:

We have delivered another year of market outperformance, enabling us to contribute a record £304.1 million to HM Treasury, outperforming our IPD bespoke benchmark, while the value of our property portfolio grew to a record £12 billion.

Note that those profits go to the Treasury. And the arrangement is that some portion of them then go back to the Queen as the Sovereign Grant. That Sovereign Grant paying for things like the expenses of being Queen and so on. This does not pay her personal expenses–she buys her morning cornflakes out of her own money just like everyone else. But should she have to buy dinner for Donald Trump as part of a State Dinner then it seems fair enough that she doesn’t have to buy the steak personally.

So, what is happening here is that there are expenses in repairing Buckingham Palace. And that is being funded from the profits of the Crown Estate. Sure, it’s all flowing through the Treasury but see above–if we were designing the system anew we probably wouldn’t do it this way.

The important point to grasp is that Buckingham Palace does not belong to Mrs. E. Windsor, it belongs to the Monarch. The Crown Estate does not belong to Mrs. E. Windsor, it belongs to the Monarch. And the profits on one part of the Monarch’s estate are being used to pay for the upkeep of another part of the Monarch’s estate.

That is, the Crown is already paying for these repairs to Buckingham Palace. Which is what makes demands that the Crown, or its estate, should pay for the repairs to Buckingham Palace so damn ignorant.

As at the top there, not understanding the economics of something is a dangerous place to start from when making demands about the economics of something.

I suspect VOA has picked up the wrong end of this non debate. The funding is not a taxpayer liability. It comes from revenues generated by the Crown Estates, all of which goes directly to the treasury. In effect, the money for repairs, will be drawn from income generated by the royal estates.

https://www.thecrownestate.co.uk/

..and how much does the house of Donald cost the US taxpayers?

How much would a suitable house for President Blair cost?

Must be a slow news day.

Originally Posted by misskit

But many lawmakers, like the Scottish National Party’s Paul Monaghan, question why the people should pay.

Because it should be a descendent of Mary on the throne?

Originally Posted by misskit

But many lawmakers, like the Scottish National Party’s Paul Monaghan, question why the people should pay.

well, jock taxpayers were made to stump up 450 million quid for their uneccessary new parliament building.