Sovereign Grant Bill

Dan Tomlinson Excerpts

Committee of the whole House & 3rd reading
Monday 14th September 2026 Commons Chamber

[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.

[Madam Deputy Speaker (Caroline Nokes)]

I call the shadow Minister.

--- Later in debate ---

[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.

Oral Answers to Questions

Dan Tomlinson Excerpts

Thursday 10th September 2026 Commons Chamber

[Greg Smith (Mid Buckinghamshire) (Con)]

17. What estimate she has made of the cost of setting up No. 10 North.

[The Parliamentary Secretary, Cabinet Office (Dan Tomlinson)]

No. 10 North will drive growth in every postcode of the country, working alongside mayors, council leaders and businesses from across Britain. The costs of setting up and running No. 10 North are covered by existing Cabinet Office budgets.

[John Lamont]

I thank the Minister for that answer, but of course for my constituents it is not No. 10 North, but “No. 10 Midlands”. According to a freedom of information request, tens of thousands of pounds have already been spent setting up No. 10 North, including £10,500 on branding, £1,700 on crockery and nearly £1,000 moving a replica Downing Street door. Does he think that this represents good value for money, and will he commit to publish annually the full cost of running No. 10 North, including staffing, travel and security?

[Dan Tomlinson]

For me, as a north London MP, visiting Manchester is very much going north, but it is fantastic to go up there and meet local businesses when I do so. On the hon. Member’s specific question, the expenditure on No. 10 North will of course be published in the usual way, along with the Cabinet Office accounts.

[Greg Smith]

Can the Minister be really specific? How many civil servants and special advisers are due to be permanently staffed at No. 10 North, and once they are all in place and working there, will the Government publish statistics for their attendance at the office?

[Dan Tomlinson]

As permanent teams are formed, and they will be formed, we will ensure that those who live nearby and at a commutable distance are encouraged to apply, and we hope they will do so. There are already some 80,000 civil servants working in the north-west of England, and I think it is a fantastic change, introduced by this Government, that more civil servants and more people from more parts of the country can contribute, at the heart of Government, to building the change that this Government want.

[Deirdre Costigan (Ealing Southall) (Lab)]

After 14 years of austerity and “Westminster knows best” from the previous Conservative Government, my constituents in Ealing Southall feel just as left behind and ignored as those in Manchester and Makerfield. Does the Minister agree with me that, if No. 10 North finally makes this country work for constituents such as mine, it will be worth every single penny?

[Dan Tomlinson]

My hon. Friend is totally right that the objective of No. 10 North is to drive good growth in every postcode across the whole country. Too many places and too many communities have been left behind for too long because power and decision making was hoarded in Westminster. Members on the Labour Benches know that the route to growth everywhere is getting it out across the country. Members on the Opposition Benches, it seems, want to keep hoarding power and decision making here in Westminster.

[Mike Wood (Kingswinford and South Staffordshire) (Con)]

We have heard again what we have had in response to a number of written questions. The Minister either does not know or will not tell us how much No. 10 North will cost, how many people work there and how many of them actually turn up to work—it is almost as though this has not been properly thought through. Does the Minister understand why, with so little information and so little transparency, so many people feel that this is a gimmick rather than a strategy?

[Dan Tomlinson]

When it comes to the efficient use of taxpayer money, I would like to point out to the House that the hon. Member—he is, of course, welcome to submit as many questions as he likes—sent 371 questions, at a cost to the taxpayer of potentially around £80,000. Of course, we are willing to have debates in this place and on the Floor of the House, and my hon. Friends in the Cabinet Office will continue to answer questions, but in the end we need to make sure that the Government are driving good growth across the whole country. No. 10 North, bringing together businesses, leaders and senior politicians from across Government, is the right route for doing just that.

[Mike Wood]

We would not have had to table so many written questions if Ministers had actually answered our first question, instead of expecting us to come up with precisely the right form of words to leave them with no way of getting out. Surely it cannot be right that it requires a freedom of information request to discover how much it costs for a replica door at No. 10 North, but the Minister refuses to answer legitimate parliamentary scrutiny. Will the Minister at least—if he does have this information, which the Department surely does—finally commit to publishing the total budget for No. 10 North, the number of staff and special advisers who are going to work there, and attendance statistics?

[Dan Tomlinson]

I think it would be best for hon. Members, rather than getting in a flap about No. 10 North, to back what we are trying to do to drive good growth, opportunity and devolution across the whole country. It is the right thing to do. The previous Government passed on to us a country that was the most geographically unequal advanced economy in the whole world. We are setting out to turn that around for the people of this country. Of course, the details on employment and the costs of No. 10 North will be published in the usual way, along with the accounts for the Cabinet Office.

[Andrew George (St Ives) (LD)]

13. What plans she has to help ensure community resilience to severe weather incidents.

Sovereign Grant

Dan Tomlinson Excerpts

Tuesday 1st September 2026 Commons Chamber

[The Exchequer Secretary to the Treasury (Dan Tomlinson)]

I beg to move,

That—

(1) provision be made amending the Sovereign Grant Act 2011—

(a) to specify the amount of the Sovereign Grant for the financial year 2027-28;

(b) to specify the percentage of the income account net surplus of the Crown Estate to be used by the Royal Trustees to determine the amount of the Sovereign Grant in subsequent financial years;

(c) to confer a duty and a power on the Treasury to specify the amount of the Sovereign Grant in subsequent financial years in certain circumstances; and

(d) for connected purposes;

(2) any increase attributable to such provision in the sums payable under that Act should be payable out of money provided by Parliament.

The motion stands in the name of the Chancellor of the Exchequer. If we approve it, the Bill to establish the sovereign grant will be published later today, and I am sure the House will have an opportunity for a longer and more detailed debate on Second Reading. The sovereign grant is the annual funding provided to support the sovereign’s official duties and the work of the royal household, including staffing, official travel and the maintenance of the occupied royal palaces.

Since 2012, the level of the grant has been determined through a statutory framework that links it to a specified percentage of the revenue of the Crown Estate—an independent public business whose net revenue profits are returned to the Exchequer. Additionally, in 2016, the previous Government agreed a temporary £369 million uplift to the grant over 10 years from 2017-18 to 2026-27 specifically to fund the Buckingham Palace reservicing programme, a major 10-year project to modernise and safeguard the palace’s essential infrastructure.

Periodically, Parliament requires the royal trustees to review whether the arrangements for the sovereign grant remain appropriate. Earlier this year, the then royal trustees completed that review and made recommendations for the appropriate level of sovereign grant funding from 2027 to 2032. The trustees recognise that with the Buckingham Palace reservicing programme nearing completion, the exceptional funding requirement for the scheme no longer exists. They therefore recommended that the overall level of funding provided through the sovereign grant should reduce from next year from £137.9 million to £99.9 million in 2027-28.

The recommendation was made based on an assessment of the royal household’s expected costs and the Crown Estate’s expected revenues between 2027 and 2032. The new level of the grant will ensure that the royal household can continue to deal with property maintenance backlogs, following some years of constrained funding during the pandemic. It will also allow the royal household to replace ageing systems to strengthen cyber-security and install energy-efficient heating systems.

With the consent of the House, given that we will debate the clauses in the Bill in more detail on Second Reading later this month, I will bring my remarks to a close. Overall, these measures ensure that the grant will continue to fulfil its core purpose of supporting the official duties of the monarch and maintaining the occupied royal palaces. I hope the House will agree that the clauses in the Bill will improve the existing framework governing the sovereign grant so that it continues to operate just as Parliament intended.

[Madam Deputy Speaker (Caroline Nokes)]

I call the shadow Minister.

--- Later in debate ---

[Dan Tomlinson]

I thank Members from across the House for their questions and for beginning the scrutiny that will take place, should the House agree that the Bill should be laid and for debate to proceed at Second Reading. Let me turn to some of the points that were raised.

The shadow Exchequer Secretary, hon. Member for North West Norfolk (James Wild)—I hope he still has that title, given the Opposition’s ongoing junior ministerial reshuffle—raised a whole range of important questions and asked whether I would write to him on these matters. I would be very happy to write to him, and I am sure the letter can be made available to others in this place, given that a whole range of questions were asked and I may not be able to cover them all in concluding. 

One key question asked by Members on all sides was on the increase in the value of the sovereign grant above inflation. That is, of course, an important question, and one that the trustees went over in detail in making the decision to increase the grant, relative to the pre-Buckingham Palace servicing costs, up to £99.9 million. It is reducing by a quarter from the current year to next year because of the Buckingham Palace refit finishing. A large part of the increase in expenditure has been on the refurbishment and the servicing costs of the occupied royal palaces. That was at £18 million in 2016-17 and next year it will be at £33.6 million. That accounts for a large share of the above-inflation increase.

The shadow Minister mentions—the House of Commons Library and others have also pointed to these—other increases in expenditure faced by the royal household: yes, on buildings and maintenance, but also on ensuring the palaces can take proactive steps to improve the energy efficiency of their heating in line with broader net zero goals that have at least some level of consensus across the House. I hope that one day we may be able to rebuild that consensus, which seems sadly to have been lost in recent months, on ensuring that we, along with our international allies, can reduce our domestic carbon emissions. There is the need for investment in cyber-security, which is growing in line with AI, and we must target other long-term measures to make sure the royal household is more resilient.

There was a whole range of questions on whether the trustees have ensured a focus on external benchmarking and on what work has been done to scrutinise the costs. I am assured that that work has taken place, and we can discuss it in more detail on Second Reading. That touches on the point raised by my hon. Friend the Member for Poole (Neil Duncan-Jordan) and others about the fact that the sovereign grant will now be set at close to 20% of the revenue of the Crown Estate, rather than 12.5%. That reflects the bottom-up assessment that has taken place, looking across the needs of the royal household and making sure it is being funded adequately for the public duties that His Majesty the King and the royal family carry out.

It is worth pointing out that those activities have increased significantly in recent years. Towards the end of her reign, the late Queen was not carrying out a large number of foreign engagements and was also hosting a smaller number of state visits. The King has increased the engagement he is carrying out on our behalf as part of his public duties. That has involved more expenditure in staff costs and to ensure that those engagements and the benefits the shadow Exchequer Secretary talked about—the representation of our country and supporting good causes here in the UK—can get the funding and support they need.

It is worth noting, in response to the question raised by the hon. Member for Hazel Grove (Lisa Smart), the Liberal Democrat spokesperson, that the sovereign grant is very clearly focused on the official duties that the royal family carry out on our behalf. It is not about supporting or funding their private activities, or things it would not be appropriate for the sovereign grant to fund.

My hon. Friend the Member for Poole raised the need for debate on these topics. We will get plenty of time on Second Reading to debate the issues that he and others have raised on transparency and clarity on where the sovereign grant is being spent. I have set out today some initial outlines. I will respond in writing and I am sure we will have a thorough debate later in the month.

I will have to get back to the shadow Exchequer Secretary on the business case thresholds, but the Treasury does of course make sure that every penny of our money is well spent, and that includes the £99.9 million that will be allocated.

I have, I hope, responded to many of the points that have been raised. I thank Members for their contributions. I look forward, if we proceed, to debating this matter on Second Reading.

Question put and agreed to.

Ordered,

That a Bill be brought in on the foregoing Resolution;

That the Chairman of Ways and Means, the Prime Minister, the Chancellor of the Exchequer, Secretary Alex Norris and Dan Tomlinson bring in the Bill.

Sovereign Grant Bill

Presentation and First Reading

Dan Tomlinson accordingly presented a Bill to specify the amount of the Sovereign Grant for the financial year 2027-28 and the percentage of the income account net surplus of the Crown Estate to be used by the Royal Trustees to determine the amount of the Sovereign Grant in subsequent financial years; to confer a duty and a power on the Treasury to specify the amount of the Sovereign Grant in subsequent financial years in certain circumstances; and for connected purposes.

Bill read the First time; to be read a Second time tomorrow, and to be printed (Bill 137) with explanatory notes (Bill 137-EN).

Oral Answers to Questions

Dan Tomlinson Excerpts

Wednesday 30th April 2025 Commons Chamber

[The Prime Minister]

I extend my congratulations to the hon. Member’s daughters for running the marathon. The Government retain the right to strike trade deals to deliver growth, jobs and opportunities for working people. We clearly set that out in our manifesto, and that is exactly what we are doing. As he knows, Parliament has a well-established role in scrutinising and ratifying trade deals, and as he references, that was strengthened under the last Labour Government.

[Dan Tomlinson (Chipping Barnet) (Lab)]

Q2. Mr Speaker,“there is going to have to be a coming together of Reform and the Conservative party in some way”—a deal, a pact or a merger. Those are not my words, but the words of the most senior Tory in elected public office in the country, the Mayor of the Tees Valley. If senior Tories are plotting it, and the Leader of the Opposition will not deny it, is not the only way to stop the plot to vote Labour tomorrow?

[Mr Speaker]

Order. There is no need to answer that, Prime Minister; you have no responsibility for any of that.