Britain’s royal family is an affordable indulgence
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
By Robert Cole
Britain’s royal family is an affordable indulgence. If taxpayers stopped funding the clan destined to be led by William Windsor and Catherine Middleton, they would escape a 1.14 billion pound liability. For some, this is a burden the cash-strapped state could do without. In fact, it is a national treasure.
True, the royal wedding will lead to some chunky one-off costs. First, there is the extra public holiday. Assuming UK GDP is evenly spread across the 260 working days of a normal year, that’s 5.9 billion pounds in lost output. The direct cost of the celebration — comprising everything from couture to security — may add another 50 million pounds.
Both these figures look too high, however. Some of the costs are sunk and others are shared. Much of the lost GDP will be recovered. The financial focus should instead be on the ongoing overhead the monarchy creates for the UK state.
The latest report of the Royal Trustees shows that the Queen and her entourage were awarded 39.9 million pounds in the year to March 2011. This figure has been quite stable, rising by just 1.6 percent a year over the past decade.
Assume these payments stretch into perpetuity (ignoring inflation), apply a discount equivalent to the yield on 10-year UK government bonds, and the present value of this liability is 1.14 billion pounds. Put another way, that’s less than 19 pounds for every British citizen.
With national debt at 1.1 trillion pounds and all manner of public services now being squeezed, cutting off the royals would represent a small symbolic saving. But the UK economy would miss the tourism and other income generated from the Windsor brand. Besides, another head of state would still cost money. Even elected ones do not come free with afternoon tea.
The British royal family is an anachronism that would not be invented if it did not exist. But for the global entertainment value alone — regardless of whether the Windsors appreciate that people are laughing at them as well as with them — the monarchy earns its place in the national portfolio. Pageantry as represented in apogee by this royal wedding should be preserved, paid for from a controlled budget, and enjoyed.