Rachel Reeves faces pressure to scrap a deal that would allocate nearly £138 million of taxpayers’ money to the Royal Family this year. The Chancellor is urged to take bold action before critical discussions on future funding for the monarchy. Ministers are preparing legislation to reduce the contentious Sovereign Grant, which has increased by almost £50 million in three years to cover Buckingham Palace renovations.
This move follows a call from Keir Starmer’s anti-corruption advisor for more transparency in royal finances, criticizing the King’s past earnings from excessive rent charged to charities. Baroness Margaret Hodge raised concerns that the recent Prince Andrew scandal could undermine the monarchy if there is no openness about the royals’ private income.
Former Labour minister Lord George Foulkes, a longstanding advocate for transparency regarding the Royal Family’s use of public funds, hopes for comprehensive reforms in the upcoming King’s Speech. He highlighted growing public discontent with the royals’ perceived lavish lifestyle amid economic challenges faced by many.
The Treasury confirmed a review of the funds received by the royals as part of a five-year assessment process. However, there are no current plans to dismantle the Sovereign Grant system established by former Tory Chancellor George Osborne in 2011.
Baroness Hodge, appointed as the government’s anti-corruption champion, emphasized the urgency for a review of the Sovereign Grant, stating that adjustments should align with the financial realities across Britain. She criticized the increasing grants to the monarchy during austerity measures, highlighting the need for fair allocation of public funds.
As public scrutiny intensifies, MPs are expected to investigate the Crown Estate, particularly examining the usage of royal properties and their value to taxpayers. Amidst these developments, the Sovereign Grant has escalated from £132.1 million in 2025/26 to £137.9 million in the current fiscal year, primarily driven by substantial Buckingham Palace refurbishment costs.
In response to queries in the House of Lords, Treasury Minister Lord Livermore indicated a forthcoming announcement on resetting the grant at a lower level post-completion of Buckingham Palace renovation works. The grant primarily covers official royal duties, including staff expenses, travel, and palace upkeep.
Notably, the King and Prince William generate private income from historic estates like the Duchy of Lancaster and the Duchy of Cornwall, in addition to inherited wealth and investment returns. These estates have reportedly yielded substantial earnings for the royals over the years, raising questions about their tax status and financial practices.
The ongoing scrutiny of the Sovereign Grant and royal finances underscores a broader debate about transparency, accountability, and modernization within the monarchy. As calls for reform grow louder, the future funding and financial practices of the Royal Family remain subjects of intense public interest and debate.