Queen Elizabeth II was laid to rest on Monday in an elaborate state funeral. Like other lavish events for the royal family, British anti-monarchists grumbled about the extravagant cost of the affair—noting that the multimillion-pound funeral would be paid for entirely by taxpayers.
The high cost of the monarchy—from Buckingham Palace to private flights to $34 million weddings—has long been a complaint for British republicans. Without the monarchy, the argument goes, the British taxpayers will no longer be compelled to foot the bill for the lavish lifestyle of a family that appears to do little other than cut ribbons and be conspicuously wealthy.
But the royals have an unusual agreement with the British government—an agreement that likely makes British citizens' tax bills cheaper, not more expensive. This is due to a deal originally cut in 1760 by King George III, allowing the British government to reap the revenues from the royal family's vast private property, called the Crown Estate, while giving them their taxpayer-funded stipend in return.
In total, these properties brought £486.9 million, or $671.9 million, in revenue in 2021. In contrast, the royal family's taxpayer-funded expenses, in the form of a "sovereign grant," totaled only $118.5 million that year, thus netting the British government a profit of almost $550 million in 2021 dollars. Were the monarchy to be retired, this deal would likely end, allowing the royal family to retain the whole profits from the Crown Estate.
The royal family owns a broad portfolio of property, ranging from Buckingham Palace and Balmoral Castle to shopping centers and acres of farmland. "The British Exchequer, which is basically the British treasury department, gets 75 percent, give or take, of the profits from the Crown Estate every year. Twenty-five percent, more or less, is withheld to finance the royal family's expenses, but they also have other sources of revenue," says Mark Vail, a political scientist at Wake Forest University. "But the lion's share comes from those returns. So, narrowly conceived, the Exchequer actually makes money on the Crown. The amount that they spend on upkeep is smaller than the amount that is returned to the Exchequer every year."
The British anti-monarchy group Republic places the estimated cost of the monarchy much higher than the sovereign grant, estimating the average cost of the monarchy at £345 million annually, or $476 million in 2021 dollars. However, Republic is unclear about how precisely they came up with this number, though they do include some other costs of the royal family not covered by the sovereign grant. For example, they note that the royal family's security costs are borne by the Metropolitan Police and that costs of local visits are covered by local councils. However, precise costs are not available. Regardless, even if this estimate is correct, it still leaves the government with a small profit of nearly $75 million.
The British monarchy also brings in an unclear amount of money in tourism revenue. While there would likely still be plenty of tourism to the British Isles without a monarchy, many of the most popular attractions, from Windsor Castle to the Tower of London, are connected to the royal family—and might very well become closed to the public if the royal family were to lose their status and retain complete control over their property.
"The royal family has a huge, imprecise value in terms of generating tourism, its effects on the British economy, and indirectly, therefore, its effects on British tax revenue," says Vail. "If you think more broadly about the economic impact on the British economy and British economic growth and, therefore, indirectly on British tax revenue, the extent to which the Crown Estate generates profits for the British taxpayers is quite considerable indeed."
That said, it is difficult to know the precise details of the royal family's financial situation. "This centuries-old and somewhat woolly arrangement between the Exchequer and the Crown is a little hard to penetrate. If you look at their public-facing documents, they play their cards quite close to the chest," says Vail. "It's almost impossible to tell how the inner workings of the royal family govern these sorts of arrangements."
Of course, there is a way to have your republican cake and eat it too. The most likely scenario of this kind is one where the British government retires the monarchy and seizes all or some of the royal family's properties. In this case, the government would likely retain at least the most tourism-friendly sites and continue to pay for the upkeep of the properties—something currently paid for with the sovereign grant. In order to make this cost-effective, the British government would have to seize and sell at least some of the royal family's commercial properties currently held in the Crown Estate.
The nuclear option, with maximum revenue for the government, would be to seize the entirety of the royal family's property and sell it at auction. This decision would likely be justified by claiming that the Windsors didn't strictly earn their wealth and the lands and other properties—including private residences like Balmoral—they bought with it, and therefore, the seizure is warranted. In this extreme scenario, one could imagine that the government might also seize valuable family heirlooms, like portraits and jewelry, to be displayed in museums or sold. The British government would stand to earn billions from such an approach. This scenario is also the most unlikely. Even opponents of the monarchy are unlikely to want to see Prince George, Princess Charlotte, and Prince Louis homeless.
While the royal family is currently revenue-positive, even under the highest estimates, there are other ways of wringing even more money out of the Windsors. However, whether this scenario is ever going to happen is another question entirely. The royal family under Queen Elizabeth II was immensely popular—but the next generations still have an opportunity to turn public opinion away from the monarchy.