Saturday, September 26, 2009

Revealed: the royal waive which means no spending cuts for the Windsors.

At a time when both Labour and the Tories are falling over themselves to prove how much they are going to cut public spending to tackle the deficit, there is one area of public spending which they find themselves unable to cut: the financing of the royal family.

Although all of the major political parties are vying to demonstrate their willingness to wield the axe on public spending, MPs will be powerless to reduce the £7.9m a year paid under the civil list because of an obscure deal struck between Buckingham Palace and the Treasury in 1972 when the current legislation governing royal finances was drawn up.
Deals with the royal family are only negotiated once every ten years and, when it was John Majors turn to negotiate with them, he agreed to an annual rise in their payments - to account for inflation - set at an astonishing 7.5%. Inflation actually ran at around 3.7% for that decade allowing the royal family to build up a surplus of £35 million, including £12 million in interest.

But here's the rub:
Despite protests from a handful of MPs that the royal family should hand back some of that surplus to the Treasury it was confirmed that parliament could not amend the annual payment downwards. The deal under the 1972 Civil List Act confirmed by background Treasury papers in the National Archives seen by the Guardian means they can only ever vote to increase it. Labour MPs protested at the time that this applied to no other category of public expenditure.
So, the only power MP's have over royal expenditure is to increase it, they have absolutely no power to move it in the other direction, even when the royal family have amassed a £35 million surplus.

At times like this the claims that Britain is a democracy ring particularly hollow. We are actually a constitutional monarchy, which is the only place in which a deal as undemocratic as that one would ever be struck.

Click title for full article.


Cecilieaux said...

I appreciate your candor. I have long thought the entire class system of the UK was for the birds.

Kel said...

Oh, it's utterly bonkers.

It's bad enough that the rich have their own education system, which is almost guaranteed to ensure that their offspring continue to have unfair advantages over the rest of us, but the Windsors actually believe that the rest of us should BOW when we are in their presence.

It's actually impossible to imagine anything less democratic.