Pressure for ‘radical’ cut to Royal public funding as King’s grant soars

Rachel Reeves faces calls to bring in large cuts to public funding of the Royal Family as Keir Starmer’s anti-corruption tsar calls for transparency on their finances

Rachel Reeves is under pressure to tear up a deal which will see nearly £138million of taxpayers’ money handed to the Royal Family this year.

The Chancellor has been urged to be “radical” ahead of showdown talks on future funding for the King. Ministers are set to draw up legislation to cut the controversial Sovereign Grant, which has soared by nearly £50million in three years to pay for Buckingham Palace repairs.

It comes after Keir Starmer’s anti-corruption tsar demanded more transparency on royal finances – saying it is “disgraceful” that the King has in the past earned money from “exorbitant” rent to charities.

Baroness Margaret Hodge warned the Prince Andrew scandal has been a tipping point – and said failure to open up on royals’ private income would weaken the monarchy at a difficult time.

And former Labour minister Lord George Foulkes – who has been pushing for transparency on the Royal Family’s use of public money for years – said he hopes for sweeping measures in the King’s Speech next month.

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He told The Mirror the royals look increasingly out-of-touch – pointing to Queen Camilla arriving at a race day in a royal helicopter in February.

Lord Foulkes said: “There’s a growing concern that when a lot of people are finding the cost of living difficult, when there are a lot of people homeless, when there are a lot of people struggling, you see the royal estates and you see the Queen travelling by a helicopter to a race meeting (at the Plumpton Racecourse), it’s getting increasingly unacceptable.

“And so it really needs to be a rather more radical review than it has been in the past.” The Treasury has confirmed the amount the royals receive is being looked at as part of a five-year review process.

But there are no plans to rip up the Sovereign Grant arrangement, which was brought in by Tory Chancellor George Osborne in 2011.

Baroness Hodge, who was named as the Government’s anti-corruption champion in 2024, told members of campaign group Labour for a Republic: “It’s (the Sovereign Grant) run out of time.

“It’s now the time for it to be reviewed, and I think she (Ms Reeves) is reviewing the terms of it. One would hope that they will come back with something that cuts that, so it reflects what’s happening in the rest of Britain.”

She added: “Right through the whole of austerity, when all public services were being cut, they were getting more and more Sovereign Grant.”

The review of the grant comes at a difficult time for the King, who was jeered by anti-monarchy protesters on a visit to St Asaph Cathedral in North Wales on Thursday. He and his heir, Prince William, have been repeatedly confronted by members of the public over Andrew’s relationship with paedophile financier Jeffrey Epstein.

MPs are also set to probe the Crown Estate amid questions about Andrew’s use of the Royal Lodge, and whether other royals’ use of properties is good value for taxpayers.

The Treasury last month confirmed the Sovereign Grant, which was £132.1 million in 2025/26, has gone up to £137.9million this financial year. It rose by £45.8million from 2024/25 – a surge to help fund £369million of repairs to Buckingham Palace over a decade.

Responding to a written question in the House of Lords, Treasury Minister Lord Livermore said: “Further detail will be announced in due course.

“The Government is committed to bringing forward legislation to reset the Grant to a lower level from 2027-28 once Buckingham Palace reservicing works are completed.”

The grant is used to fund the King’s official duties, including staff costs, travel and palace maintenance. The most recent statement, covering 2023/24, revealled £41.2million was spent on property maintenance and £4.7million on travel.

There was £475,000 spent on 141 helicopter flights, while a charter flight to and from Belfast and helicopters around Northern Ireland cost £80,000. The salaries of 539 were also paid for. YouGov polling in January found 51% of the public think the royals are good value for money, and 64% want the monarchy to continue.

Around a quarter of voters believe the UK should have an elected head of state.

The King and Prince William derive private income from two historic estates – the Duchy of Lancaster and the Duchy of Cornwall – as well as their inherited wealth and returns on investments.

The two Duchies are estimated to have earned the royals the equivalent of £1.2billion in 70 years. A Sunday Mirror investigation in 2024 found the Duchy of Cornwall made an average of £3.3million a year from selling properties from 2010 to 2020.

But in the four years after this, this soared to £11million a year – but it is exempt from capital gains tax. Critics have argued the two Duchies should be public assets, but successive Governments have accepted them as private wealth.

During her time as an MP, Baroness Hodge headed a Commons Public Accounts Committee probe into the Duchy of Cornwall, finding it has an unfair advantage over commercial competitors.

There is no legal obligation for the King or Prince of Wales to pay tax – although the monarch and their heir have voluntarily paid income tax on income from the Duchies, and earnings from personal investments since 1993.

They do not pay tax on the Sovereign Grant, and are also exempt from capital gains and inheritance tax. The amount they do pay is not made public.

In 2024 an investigation by Channel 4 and the Sunday Times found the private estates earned millions in rent from the NHS, schools and the armed forces, as well as charities. Baroness Hodge said she was particularly galled to learn several charities were paying millions of pounds for space in Camelford House, London, owned by the Duchy of Cornwall.

She said: “He (the King) has got a massive, massive property portfolio. There’s lots that’s shocking, but the one that shocked me the most was that property in Vauxhall Bridge Road that’s his.

“And he rents it out at exorbitantly high rent levels to charities. And what is particularly disgraceful is that he rented it out to two charities of which he is the president. One is Marie Curie, and the other is the Imperial Cancer Research Charity. So that was pretty awful.”

She told the group that allegations about Andrew Mountbatten-Windsor’s conduct had been a “tipping point” – and said failure to modernise would continue to weaken the royal family. She said: “My own view, which I say all the time, is if they don’t modernise, if they don’t actually accept transparency something else will come up… And then, every time, it weakens them.

“It’s another nail in their coffin. If they want to be sustainable over time, they’ve got to modernise, and part of the modernisation is transparency and paying your taxes.”

A Buckingham Palace spokesperson said: “The Sovereign Grant is reviewed every five years by the Royal Trustees, which include the Chancellor, to ensure the level of funding for the Royal Household remains appropriate to support the official duties of The Sovereign in his roles as Head of State, Nation and the Commonwealth. Each year the Royal Household publishes a report setting out how the Sovereign Grant is spent, and the Sovereign Grant accounts are audited by the National Audit Office.”

What is the Sovereign Grant?

The Sovereign Grant is a sum set each year by the Royal Trustees – comprising the Prime Minister, the Chancellor of the Exchequer, and the Keeper of the Privy Purse.

Under a deal reached during the coalition Government, the grant is calculated based on the profit of the Crown Estate. Currently 12% goes into the grant, having risen to 25% in 2017-18 when the Tories were in power.

It means the amount can be set at the start of each financial year, but critics argue it gives no scope for Parliament to scrutinise it. In the past decade, over £5billion of profits from the Crown Estate have been paid to the Exchequer.