Sovereign Grant Bill: Allocation of Time
Monday 14th September 2026
(4 days, 4 hours ago)
Commons ChamberRead Full debate Sovereign Grant Bill 2026-27 Read Hansard Text Amendment Paper: Committee of the whole House Amendments as at 14 September 2026 - (14 Sep 2026)
Sovereign Grant Bill
Monday 14th September 2026
(4 days, 4 hours ago)
Commons ChamberRead Full debate Sovereign Grant Bill 2026-27 Read Hansard Text Watch Debate Read Debate Ministerial Extracts Amendment Paper: Committee of the whole House Amendments as at 14 September 2026 - (14 Sep 2026)
The Parliamentary Secretary to the Treasury (Torsten Bell)
I beg to move, That the Bill be now read a Second time.
The Bill relates to the sovereign grant that Parliament has provided to support the official duties of the monarch and the work of the royal household. The Bill implements the conclusions of the recent royal trustees’ review of that sovereign grant. In doing so, it resets the grant level for the next financial year, giving effect to the commitment of successive Governments and the expectation of the royal household for a reduction in the level of funding following the completion of the Buckingham Palace reservicing programme, which keen Members will have heard about on the news this morning on the back of the discovery of some historical documents.
The Bill also makes targeted improvements to the statutory framework for this funding, introducing limited flexibilities to ensure that funding levels remain appropriate even in exceptional circumstances. This will make it easier to respond where funding would otherwise become inappropriately low or inappropriately high.
To support the monarch’s official duties, the sovereign grant funds the staff, official travel, property maintenance and essential services for the sovereign to fulfil their unique constitutional role. That role extends beyond ceremonial functions: it includes hosting heads of state, supporting diplomatic engagements, representing the United Kingdom overseas, and strengthening our relationships across the Commonwealth and the world. These activities support the UK’s interests, including trade, investment and security. At home, the grant supports the significant role of the sovereign and the wider royal household, from recognising charitable and voluntary service to bringing communities together across the United Kingdom.
Since 2012, the amount of the sovereign grant has been determined through a statutory framework established by Parliament in the Sovereign Grant Act 2011. That framework requires the annual grant amount to be calculated by reference to the previous year’s expenditure and a percentage of the profits of the Crown Estate—an independent public corporation whose net revenue profits are returned to the Exchequer. To ensure that funding levels remain appropriate, the 2011 Act requires the royal trustees—the Prime Minister, the Chancellor of the Exchequer and the Keeper of the Privy Purse—to conduct regular reviews.
Jim Shannon (Strangford) (DUP)
The Minister is setting the scene incredibly well. He is right to underline that the British monarchy has clearly been a source of stability across the world, and to say that its unity remains irreplaceable in a world full of division. We acknowledge the ongoing need to review and adjust the sovereign grant, but does he agree that it is vital that the monarchy remains appropriately funded? When he sums up, can he assure us that the monarchy will be funded to effectively fulfil its duty to this country, the great United Kingdom of Great Britain and Northern Ireland?
Torsten Bell
I thank the hon. Gentleman for his tribute to the monarchy. His description of what he would like to see in the setting of the sovereign grant reflects exactly what has to take place. As I was just explaining, the three trustees are required to take into account the funding required to deliver the function that we all want our monarch to deliver.
Danny Kruger (East Wiltshire) (Reform)
There is what might be an important innovation in the text of this year’s sovereign grant annual report and accounts, which the Bill refers to and which the Minister is describing. Usually, the description of the sovereign’s role includes the term “defender of the faith”, but that term does not appear in this year’s report and accounts. Instead, the monarch is referred to as the
“Supreme Governor of the Church of England”.
That is good. The report also says that he
“protects the space for Faith within the multi-faith nation.”
That is an admirable ambition, but I invite the Minister to confirm that no alteration to the monarch’s role is implied in that change. If there were to be such an alteration, would it be debated properly in Parliament, rather than introduced quietly through these sorts of official reports?
Torsten Bell
The hon. Member has shown interest in this topic over many years, in a lot of different environments. This is a question of “and”, rather than “or”. As he says, the document spells out that His Majesty is the Supreme Governor of the Church of England. I encourage him to go on to the royal family’s website, where he will see the language about the King being the defender of the faith very prominently displayed. I hope that gives him the reassurance that he seeks.
Dr Andrew Murrison (South West Wiltshire) (Con)
We are extremely fortunate to have a monarchy, particularly this monarchy. Since the reign of George III, the profits from the Crown Estate have accrued to the Treasury; in return, the institution of the monarchy receives a grant, which we are debating today. Part of that is an annually determined proportion of the profits. However, for things other than exceptional expenditure, such as on Buckingham Palace, the institution presumably requires some sort of stability and certainty about the receipts necessary to carry out its functions. Is it logical for the grant to be a proportion of profits, which will inevitably vary year by year, because they are a commercial matter?
Torsten Bell
I think everybody in this House will agree with the thrust of what the right hon. Gentleman successfully argues. A royal household with an important role, both as the sovereign, and in maintaining an estate of grade I listed monuments, needs certainty about its income. It is not for me to defend the previous Government, but the 2011 Act provided two bases for funding. The first is the mechanism that he mentioned, relating to a proportion of the profits of the Crown Estate. The second is a proviso that there be no fall, from year to year, in the amount of the grant. That is to provide exactly the stability that he talks about. That is why we are taking forward this primary legislation, with that dual lock. The reduction this year is purely to take into account the bringing to an end of the Buckingham Palace 10-year repair project. The legislation then provides an ongoing commitment to the royal household and the monarch that the grant will remain at next year’s level, at least. I hope that offers the right hon. Gentleman reassurance.
As I was saying, a key point of context is that Parliament agreed a temporary uplift to the grant from 2017-18 to 2026-27 to fund the Buckingham Palace reservicing programme. That was a major 10-year investment to modernise ageing infrastructure, replace critical electrical and mechanical systems, and safeguard the long-term future of one of the nation’s most historic buildings. As that programme nears completion, it is time for the level of funding to be reassessed. Earlier this year, the then royal trustees completed the latest review and considered both the royal household’s projected expenditure and the Crown Estate’s projected revenues for the period from 2027 to 2032. The trustees concluded that with the Buckingham Palace reservicing programme nearing completion, the exceptional funding requirements that justified that temporary uplift no longer exist. They therefore recommended that the sovereign grant should fall from £137.9 million in 2026-27 to £99.9 million in 2027-28. That represents a reduction of almost £38 million, or more than a quarter.
At the same time, the trustees recognised that the royal household continues to face operational pressures in delivering what we all think of as crucial work. The recommended amount of funding will enable the household to address a maintenance backlog that was exacerbated by the pandemic, and to replace ageing digital infrastructure to strengthen cyber-security. The grant provided for by this Bill ensures value for money for taxpayers, and that the royal household can continue to discharge its crucial functions effectively.
This Bill delivers a fair and proportionate funding settlement. It reduces the amount of the sovereign grant, following the completion of a major capital programme; it improves the resilience and sustainability of the statutory framework established in 2011, while maintaining parliamentary oversight; and it ensures that the sovereign grant can continue to fulfil its core purpose, which is supporting the official duties of the monarch and maintaining the occupied royal palaces on behalf of the nation. On that basis, I commend this Bill to the House.
Richard Fuller (North Bedfordshire) (Con)
I thank the Minister for his speech. This follows a recent debate on ways and means that his colleague the Exchequer Secretary had with my hon. Friend the Member for North West Norfolk (James Wild). I do not wish to repeat the points that were made on that occasion.
His Majesty’s official Opposition are supportive of this Bill. As the Minister laid out, the 2011 settlement has run its course; it did well for its time, but some aspects of it were due for reconsideration. As he said, the recent significant programme of upgrades to royal residences for public purposes has now reached its conclusion—I think this year is the final year of the additional funds—so it is timely for us to look for a change in structure. I thank the Minister’s colleague the Exchequer Secretary, because on the 11th of this month, he wrote in reply to questions from my colleague, answering questions about some of the points that we may get into in detailed consideration of the Bill.
One of the substantial changes of principle in this Bill is that the ongoing ratchets that were effectively put in place by the 2011 Act have essentially become a backstop of £99.9 million. In his answer to my right hon. Friend the Member for South West Wiltshire (Dr Murrison) about potential variability, the Minister has given us some confidence about the ability to plan; we know that there will not be an absolute reduction. However, questions remain about extraordinary circumstances in which the Treasury would be able to reduce the settlement in any one year. I think that the Liberal Democrats will be asking that question in reverse—about changes to the percentage that may occur—but those are matters that we can discuss in Committee.
His Majesty’s official Opposition recognise the tremendous work that His Majesty the King and the royal family do on behalf of our nation. We understand the power that that provides our nation with in our international relations, and the comfort that it gives to the people of this nation, and we support the Second Reading of this Bill.
Brian Leishman (Alloa and Grangemouth) (Lab)
My sense of patriotism does not come from a flag, an anthem or the royal family. Instead, my patriotism comes from things like our national health service; movements such as that of the Levellers, who were committed to popular sovereignty, extended suffrage, equality and religious tolerance; and how Britain stood up to and defeated the evil of fascism, both abroad during the second world war and at home in places like Cable Street, where Jewish residents, Irish dockers, trade unionists, socialists and others united to stop the British Union of Fascists movement from marching through Jewish neighbourhoods. That is the sort of patriotism I love.
I have the utmost respect for any citizen who believes that the royal family is a fundamental part of British life. I have no issues with that opinion; people are entitled to it, but it is simply not one that I share. There were many reasons why I joined the Labour party. One was to change—
Madam Deputy Speaker (Caroline Nokes)
Order. I am sure that the hon. Gentleman is expecting this, but it is important that he focuses his remarks on the Sovereign Grant Bill, and not wider issues to do with the monarchy, patriotism or why he joined the Labour party.
Brian Leishman
I will just put a red pen—a very dark red pen, obviously—through some of the comments that I wished to make. I will accelerate my remarks. It is clear that we are a nation of persistent inequality. I fully appreciate that the role of the royal family is way down the list of pressing issues that my Government have to deal with, but when looking at the intense suffering that millions of people are experiencing, I cannot help but feel that the sovereign grant money could and should be directed elsewhere, and not to a family worth an estimated £21 billion.
Madam Deputy Speaker (Caroline Nokes)
I call the Liberal Democrat spokesperson.
Bobby Dean (Carshalton and Wallington) (LD)
The Liberal Democrats understand the purposes of this Bill and accept some of the Government’s conclusions about how the grant needs to change, but we continue to be concerned about transparency. It is important to make it clear at the start that the sovereign grant provides no personal income to the King or Queen or any member of the royal family; the funding is tied entirely to the running of the institution. We recognise that the household’s budget has increased, but the bulk of that increase is earmarked for a maintenance backlog across the royal palaces, green infrastructure, and cyber-security in an increasingly hostile international landscape. We agree that it is right for the grant to be reset now that the Buckingham Palace programme has finished. However, taxpayers will rightly have questions about where and, importantly, who this money goes to. The Government must ensure that not a penny of this grant goes to Andrew Mountbatten-Windsor, who disgraced his title in office —
Madam Deputy Speaker (Caroline Nokes)
Order. I reiterate that we are going to stick to the scope of the Sovereign Grant Bill, which is very specifically only about the amount of the sovereign grant and how it is to be determined in future years. The hon. Gentleman will be aware that the grant goes to the King.
Bobby Dean
Thank you, Madam Deputy Speaker. I will move directly on to our amendment, which would insert a new subsection stopping the royal trustees from proposing any future increase to the percentage of Crown Estate profit used in the grant formula unless three conditions are met first: the National Audit Office must be commissioned to carry out a value-for-money assessment of the proposed change—
Madam Deputy Speaker (Caroline Nokes)
Order. Apologies, and I appreciate that I am now leaping to my feet with monotonous regularity, but it would be more appropriate for the amendment to be discussed in Committee than on Second Reading.
Bobby Dean
Clearly, I have been very well briefed. I think my comments at the beginning were probably sufficient. We understand the purpose of the Sovereign Grant Bill. We have some concerns about transparency, but I will return to those later.
Neil Duncan-Jordan (Poole) (Lab)
As I said during the ways and means debate last week, I welcome the Government’s decision to bring forward this legislation to make it possible for the sovereign grant to be reduced in future if necessary, and to return any unspent grant more quickly. I am grateful to the Exchequer Secretary for his letter this morning, which covered some of the points that I made in that debate. Today’s Bill feels like a missed opportunity, especially as a number of issues surrounding the grant remain to be addressed by the Government.
The first issue is the link between the grant and the profits of the Crown Estate. Members will know that the Crown Estate commands a massive £16 billion portfolio, owning much of our coastline and the corresponding seabed, but it is not the private property of the monarch, nor do the revenues from the estate belong to them. In fact the Crown Estate is quite separate from the monarchy, and operates to generate revenue for the Treasury. The implication of the current arrangement is that the monarch forgoes his profits from the Crown Estate in return for a payment of a percentage via the sovereign grant, yet all the profits are public funds. That is an odd form of indexation, and raises the question of why the grant is not based on the needs of the monarchy or its costs. It would have been better if the Bill broke the link to the Crown Estate and gave power to the royal trustees to decide the appropriate figure, based on need.
That raises the second question of how the grant should be set. I believe that it should be done on an annual basis, and that it is important for the funding of the monarchy to be transparent and open for MPs to debate. All public funds should rightly be open to scrutiny and parliamentary oversight. On numerous occasions I have tried to table questions about these issues, only to be told that this is not something for Parliament to discuss. That must change, and that is why I will support amendment 1.
The Bill calls for a substantial increase in the grant, and a rise from 12% of the Crown Estate profits to 20.5%. However, the royal family is smaller than it was in 2011, when the grant was first introduced, and the King and the Prince of Wales are said to favour a slimmed-down monarchy. It would appear that the anticipated increase to £99.9 million is not based on any assessment of need, and I should appreciate it if the Minister explained exactly how we have arrived at a figure that is 322% higher than it was when it was first introduced in 2012. Even allowing for inflation and the building maintenance programme that has been mentioned, the proposed grant is well over twice the real value of its starting point. As I mentioned during the ways and means debate, there are also some anomalies when we look at the monarch’s wider financial arrangements. Why, for example, is no account taken of the profits of the Duchy of Lancaster when the level of the sovereign grant is being set?
Ideally, Madam Deputy Speaker—I can see that you are very keen to bring me to book—we should have before us a Bill to ensure that the amount of the sovereign grant is appropriate to the relative needs of the monarch, and that Members of Parliament are not restricted to just approving a new percentage figure once every five years, via an arbitrary and unnecessary link to the Crown Estate. The Bill is, in my view, a missed opportunity to modernise the monarchy. I look forward to hearing the Minister’s comments.
The Exchequer Secretary to the Treasury (Dan Tomlinson)
I thank Members on both sides of the House for their contributions to the debate. I thank, in particular, my hon. Friend the Member for Poole (Neil Duncan-Jordan) for his engagement in the ways and means debate. I was glad to be able to write to him and to the Opposition in the intervening days to clarify a few points and, I hope, expand on some of the information that I gave during that debate.
Let me briefly touch on the headlines of the three things that the Bill is doing; I will then deal with the points that have been raised, and will wrap up in good time. First, the Bill resets the level of the sovereign grant to reflect the fact that the exceptional funding requirement associated with the Buckingham Palace reservicing programme is coming to an end. Secondly, it establishes a revised mechanism for calculating the grant in future years. Thirdly, it introduces limited powers to adjust the grant in exceptional circumstances—powers that have already been discussed in our proceedings—including circumstances in which funding would otherwise become inappropriately high. The Government believe that, taken together, these changes amount to a measured and sensible reform.
I now turn to some of the points raised. My hon. Friend the Member for Alloa and Grangemouth (Brian Leishman) made a valuable contribution. I would have enjoyed hearing more of it, but I understand that he had to keep within scope, and I will ensure that I do so too, Madam Deputy Speaker. His final point was that he does not think it is appropriate for this sum of £99.9 million to go to the royal family. It is worth clarifying that this grant is not for the family’s personal purposes, but to enable His Majesty the King and the working members of the royal family to carry out their official duties on behalf of all of us and of the country.
Turning to the Liberal Democrat spokesperson, the hon. Member for Carshalton and Wallington (Bobby Dean), I look forward to debating the proposed amendment in more detail in Committee. I thank the Liberal Democrats and the official Opposition for their support and engagement on the Bill.
If I understood my hon. Friend the Member for Poole correctly, his key question is: why is the grant set relative to the profits from the Crown Estate at 20.5%, rather than the needs of the household? I reassure him that the key thing is the needs of the household, rather than the figure of 20.5%. The way the trustees arrive at the relevant figure is via a bottom-up assessment of what is required to enable the royal household to carry out its duties on our behalf. It starts not with the relevant percentage of the Crown Estate profits, but instead with the specific needs and requirements of the monarchy.
On my hon. Friend’s specific point about the increase in the sovereign grant over recent years, he is right to point out that it is set to increase by more than inflation, but the trustees interrogated a number of reasons for that when the £99.9 million grant was determined. They include, for example, an £11.7 million addition for a 10-year programme to replace the gas heating systems at Buckingham Palace and Windsor Castle as part of the royal household’s clean energy transition; £4.3 million to modernise ageing digital infrastructure and strengthen cyber-security, and replace some legacy IT systems, some of which are over 20 years old; and £11.5 million for other cost increases such as on utilities, travel, housekeeping, equipment and professional services.
I do take and understand my hon. Friend’s point about inflation, but I point out that the grant will in effect be frozen—in cash terms—throughout the next five-year period. That goes to the point made by the right hon. Member for South West Wiltshire (Dr Murrison) about the stability of the royal household’s finances. It also goes some way to explaining why the Government do not think that coming back each year would be the most appropriate and efficient way to set the grant. For those seeking to deliver value for money for the taxpayer, particularly with long-term capital expenditure, via the sovereign grant, it is much easier to do so when it is possible to plan on a long-term basis.
Jim Shannon
The royal family have buildings, which are of some age, all over the country, and by their nature there is deterioration due to their size, the heating, the roofs, the way the buildings are and the length of time they have been in existence. Does the Minister agree that, when it comes to the responsibility of the royal family to look after these buildings, further consideration must be given to those that are showing years—maybe hundreds of years—of deterioration?
Dan Tomlinson
Yes, I agree with the hon. Member on that point. These grade I listed buildings and scheduled ancient monuments are a very significant part of our national story and, for many, of our national identity. On his point about the quality of the estate, I can tell the House that independent surveys have found that 52% of the estate was at the target condition in 2020, but that had fallen to 38% by 2025.
To conclude, the question before us is a practical one: do we wish to leave in place a framework that no longer properly reflects the end of the exceptional reservicing expenditure on the palace; or do we wish to put in place a revised framework that resets the grant, improves flexibility and preserves the ability of the grant to fulfil its core purpose? The Government’s view is that the right course is the latter. These measures are targeted, proportionate and deliver value for money for taxpayers. They improve the existing framework to the sovereign grant so that it continues to operate, I believe, as Parliament intended. I commend the Bill to the House.
Question put and agreed to.
Bill accordingly read a Second time; to stand committed to a Committee of the whole House (Order, this day).
Sovereign Grant Bill
Monday 14th September 2026
(4 days, 4 hours ago)
Commons ChamberRead Full debate Sovereign Grant Bill 2026-27 Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Committee of the whole House Amendments as at 14 September 2026 - (14 Sep 2026)
The Second Deputy Chairman of Ways and Means (Caroline Nokes)
I remind Members that in Committee Members should not address the Chair as Deputy Speaker. Please use my name when addressing the Chair. Madam Chair, Chair and Madam Chairman are also acceptable.
Clause 1
Amount of Sovereign Grant for the financial year 2027-28
Question proposed, That the clause stand part of the Bill.
The Second Deputy Chairman
With this it will be convenient to discuss the following:
Amendment 1, in clause 2, page 2, line 20, at end insert—
“(3) Section 6 of the Sovereign Grant Act 2011 is amended as follows.
(4) After subsection (4) insert—
“(5) The Royal Trustees may not make any proposals to increase the percentage specified in Step 1 (as amended by Section 2 of the Sovereign Grant Act 2026) for determining the amount of the Sovereign Grant, unless—
(a) they have commissioned the National Audit Office to undertake a value for money assessment of the proposed change, and
(b) the National Audit Office’s report has been laid before both Houses of Parliament, and
(c) a motion approving the change has been debated and approved by resolution of the House of Commons.””
This amendment would ensure that any future increase to the percentage of Crown Estate profit used to calculate the Sovereign Grant is subject to independent assessment and an affirmative vote in the House of Commons.
Clause 2 stand part.
Clauses 3 and 4 stand part.
The Exchequer Secretary to the Treasury (Dan Tomlinson)
I will turn briefly to each of the short clauses in the Bill.
Clause 1 gives effect to the central purpose of the Bill. It sets the amount of the sovereign grant for the financial year 2027-28 at £99.9 million. In doing so, it resets the level of the grant following the completion of the Buckingham Palace reservicing programme. As that programme nears completion, the temporary funding associated with it is no longer required. Both the previous Government and this Government recognised that the level of the grant should therefore be reset and that legislation would be necessary to achieve that outcome. That is what clause 1 does: it establishes a grant of £99.9 million for 2027-28, reflecting the conclusions of the 2026 royal trustees review. The practical effect, therefore, is that funding falls from £137.9 million in this financial year to £99.9 million in 2027-28.
Chris Vince (Harlow) (Lab/Co-op)
Thank you, Madam Chair. I desperately tried not to intervene at all, but I could not stop myself. I was on the Modernisation Committee when it had the opportunity to visit Buckingham Palace to see some of the regeneration work being done. Does the Minister feel as reassured as I do that the renovation work was done as efficiently and practically as possible, bringing in apprentices from elsewhere—I do not think any of them came from Harlow, unfortunately—to ensure it was successful?
Dan Tomlinson
My hon. Friend is right to highlight that the works on Buckingham Palace over the past 10 years have been carried out with efficiency and effectiveness. In fact, the National Audit Office took a look at the programme of work and was able to commend it for its effective use of taxpayer money, which is of course very important. Clause 1 delivers, therefore, the intended reduction in funding following the completion of that work, and implements the conclusions of the royal trustees review to establish a new baseline for future years.
Having reset the grant for 2027-28, clause 2 turns to the framework that will determine grant funding in future years. The grant has, since 2012, been linked to the performance of the Crown Estate. That underlying principle remains unchanged by the Bill. Clause 2 updates the percentage of Crown Estate profits used within that calculation, so that the framework remains appropriate after the grant has been reset through that bottom-up calculation. It sets the relevant percentage at 20.5%. Returning to conversations we had on Second Reading, I want to reassure Members that that figure is not arbitrary. It comes directly from the conclusions of the June 2026 royal trustees review, which assessed both the royal household’s expected expenditure requirements and the Crown Estate’s forecast revenues over the period 2031-32.
Clause 3 introduces targeted safeguards to ensure that the funding framework can continue to operate effectively in exceptional circumstances. This is to ensure that where royal trustees conclude that the amount produced by the statutory formula would result in the sovereign grant reserve falling below 10% of annual expenditure or exceeding 50% of annual expenditure, and where the existing framework can adequately correct that outcome, the trustees must explain that conclusion in their annual report and identify the new amount they believe would be appropriate. The Treasury must then implement that through regulations. This reform allows greater flexibility to prevent reserves becoming either too large or too small, and it means that action can be taken before reserve levels move outside of a sustainable range, rather than waiting until existing statutory mechanisms have been triggered.
The second mechanism is a limited power to increase the grant during a financial year in genuinely exceptional circumstances, and is intended as an emergency power. It can only be used when unforeseen circumstances arise during a financial year that cannot be reasonably addressed through the normal annual funding process. Clause 4 contains standard provisions relating to commencement and the short title of the Bill; I commend this and all other clauses to the Committee.
Richard Fuller (North Bedfordshire) (Con)
I thank the Minister for his clear exposition of the Bill’s clauses. He emphasised the importance of the 2026 royal trustees’ review. The interesting thing is that it is their forecast of their needs over the next five years on which a lot of the mechanism rests. Notwithstanding some comments made by Government Back Benchers, a lot of the intention of the Bill is about financial restrictions on expenditure, rather than there being excess expenditure in the future. I am grateful for the Minister’s letter to my hon. Friend the Member for Dumfries and Galloway (John Cooper); in his summing up, will the Minister give a bit more comfort and clarity on some of those matters?
If I am right, the £99.9 million is the estimate of what is required this year, based on a review of what the forecast requirements may be through to 2031-32. Will the Minister explain how those financial assessments were made? What discount rate was used to work out what the estimates might be? I am not questioning it, and I do not need a precise figure; what I am looking for is some comfort from the Minister that he feels that those financial projections, that model and the work of the trustees give him adequate confidence in the baseline of £99.9 million. That leads, in turn, to why we have 20.5% variability over the next five years.
In the Minister’s response to my hon. Friend the Member for Dumfries and Galloway, I was also interested to hear about the use of other income. In his letter, the Minister said:
“The Household forecasts that this income will increase by around 25% over the review period, based on recent performance, detailed modelling and increased visitor capacity… If income were lower than forecast, there is no expectation that the Grant would increase above £99.9 million per year.”
Can the Minister confirm that, essentially, the other income is being treated as supplementary to what we see as the duty of the sovereign grant? I would be grateful to the Minister for reconfirming what he put in his letter.
In clause 3, I am interested in proposed new section 6(5) to the Sovereign Grant Act 2011, stating that the reserve fund will be:
“no lower than 10% and no higher than 50%”.
What is of interest there is the duty to change the amount of the sovereign grant. There is an issue about to what extent that reserve, at 10% to 50%, is going to cover reasonable expectations of expense. That gets to the point that my hon. Friend the Member for Dumfries and Galloway made earlier about long-term plans. If significant capital expenditures are due, then the reserve, by its very nature, will be quite variable during the period. I would like some comfort from the Minister that the range of 10% to 50%—which sounds, on face value, to be reasonable—was correct in the modelling.
There is just one slight concern about the Treasury’s thinking on this. When my hon. Friend the Member for North West Norfolk (James Wild) asked about powers to adjust the grant between reviews and the circumstances in which they might be used, the answer from the Treasury was:
“These powers are intended for exceptional circumstances and are not expected to be used routinely”,
which, of course, is the definition of exceptional. However, the letter does then go on to talk about major fire, flood and so on, saying that in those circumstances,
“Any adjustment would require Parliamentary approval through secondary legislation.”
Could the Minister advise on whether or not that approval will be subject to the affirmative procedure? I think that other Members may want to raise that as well.
The Second Deputy Chairman of Ways and Means (Caroline Nokes)
I call the Liberal Democrat spokesperson.
Bobby Dean (Carshalton and Wallington) (LD)
The Liberal Democrats support the thrust of the Bill. We understand why the royal household budget has increased and agree that it is right for the grant to be reset now that the Buckingham Palace programme has finished. However, we remain concerned about transparency and have put forward an amendment to that effect.
Our amendment would insert a new subsection that would stop the royal trustees proposing any future increase to the percentage of Crown Estate profit used in the grant formula unless three conditions are met first. The National Audit Office must be commissioned to carry out a value-for-money assessment of the proposed change; that NAO report must be laid before both Houses; and finally, the House of Commons must debate and approve the change by resolution.
This contrasts with the Bill as drafted, which sets the figures straight into primary legislation on the strength of the royal trustees’ own conclusions, with no separate independent check built in for the next time that the percentage is revisited. That matters because it is the royal trustees who produce that report—the Prime Minister, the Chancellor and the Keeper of the Privy Purse. In other words, the people proposing the change are marking their own homework, with no independent body or vote required to test whether it represents good value for the taxpayer.
Our amendment is not about opposing the grant or blocking today’s readjustment, which the Liberal Democrats accept is right now that the reservicing works are complete. Instead, it is about ensuring that if a percentage increase is proposed again in the future, taxpayers get an independent, NAO-assessed value-for-money check, with their elected representatives getting an actual vote on it, rather than the change simply following through the trustees’ own formula.
To conclude, the Liberal Democrats believe that greater transparency and independent scrutiny of taxpayer money must be built into the system for the future, not treated as optional, and that that is best guaranteed by external checks, not simply taking the Government’s word for it.
Dan Tomlinson
I thank the Opposition spokespeople for their questions and comments.
Turning first to the questions from the spokesperson for the official Opposition, the OBR forecasts for inflation, interest rates and so on were used as the underlying basis for the projections. To the extent that Members across the House support the OBR and its independent forecasting duties, I hope that they would support the royal household using those forecasts.
On the hon. Gentleman’s point about the reserve, the household previously aimed to maintain reserves of at least 5% of annual expenditure. This legislation formalises a slightly higher reserve at 10% as the floor, with 50% being the ceiling. It is our judgment that that is reasonable. Of course, 50% is a significant reserve.
The hon. Gentleman asked what happens to the reserve. Of course, it can be drawn down on in times when the royal household faces significant in-year financial costs. The first reaction of the Treasury and the royal trustees would not be to come to the House to ask for a vote to increase the expenditure in the case of additional in-year costs. Instead, it would be hoped that capital programmes could be smoothed out over time, and that the flexibility allowed by the reserve could be drawn on.
The hon. Gentleman asked specifically whether the secondary legislation in the event of changes would be subject to the affirmative or negative procedure in the House. I can confirm that if the percentage were to go up, it would be subject to the affirmative procedure, and we would therefore have the option to debate and discuss. If the percentage were to go down, my understanding is that it would be subject to the negative procedure.
I am grateful to the Liberal Democrat spokesperson for raising the important issues of transparency, accountability and value for money. However, it is the Government’s view that the Liberal Democrat amendment is not necessary under the existing framework. Any future proposal to increase the percentage used to calculate the sovereign grant would already require a published report from the trustees setting out the rationale and, as I have just said, would require the approval of the Commons through the statutory instrument being subject to the affirmative procedure, so Members of the House would have the opportunity to analyse and debate any proposed change.
The National Audit Office already plays an important role in scrutinising the sovereign grant. It audits the grant annually and can undertake value-for-money examinations where it considers that such work would assist Parliament. Indeed, it exercised these powers, as we have discussed, in relation to the Buckingham Palace reservicing programme.
The Liberal Democrat amendment would also create a unique test that is not applied to other bodies funded by the public sector. It is the Government’s view that the sovereign grant is already subject to robust arrangements for accountability and scrutiny, including the managing public money principles, accounting officer oversight, National Audit Office audit and parliamentary approval for legislative changes.
Question put and agreed to.
Clause 1 accordingly ordered to stand part of the Bill.
Clauses 2 to 4 ordered to stand part of the Bill.
The Deputy Speaker resumed the Chair.
Bill reported, without amendment.
Bill, not amended in the Committee, considered.
Third Reading
Dan Tomlinson
I beg to move, That the Bill be now read the Third time.
I thank hon. Members across the House for their contributions today as the Bill has progressed. I believe that we have done it justice, interrogating various points of contention and clarification on Second Reading and in Committee. I commend this Bill to the House.
Richard Fuller
I thank the Minister for presenting the Bill, but most importantly I thank His Majesty the King for his gracious service, on behalf of all Members of this House and all people of this country and the territories and nations overseas. I hope that he will use the sovereign grant as wisely and sagaciously as his governance over us allows. I support the Bill.
Bobby Dean
I thank the Minister for his comments on the Liberal Democrat amendment that was discussed earlier, and we recognise the arguments that he made in response. I support the Bill.
Question put and agreed to.
Bill accordingly read the Third time and passed.
Sovereign Grant Bill
Tuesday 15th September 2026
(3 days, 4 hours ago)
Lords ChamberRead Full debate Sovereign Grant Bill 2026-27 Read Hansard Text Amendment Paper: Committee of the whole House Amendments as at 14 September 2026 - (14 Sep 2026)