THE ROYAL ECONOMY
The Royal Family’s wealth is a contentious topic in the UK. Many people love the traditions and ceremony that go hand in hand with it while others believe the whole thing to be a drain on taxpayer money.
Whichever side of the fence you’re on, there’s something undoubtedly fascinating with the Royals’ finances – how they make and spend their wealth.
From hidden assets and lavish weddings to their beneficial impact on everything from tourism to trade, the Royal Economy has its pros and cons which we’ll be exploring below.
THE COST & BENEFITS OF MODERN ROYAL WEDDINGS
Whenever a wedding occurs in the Royal Family, it captures attention on a global scale. This often leads to a boost in money spent in the UK by both its residents and people visiting from abroad to catch a glimpse of the ceremony.
However, the costs involved in organising these occasions are often immense. While much of the funding does come from the pockets of the Royals themselves there will always be some of the bill footed by the taxpayer.
Here is a comparison of the marriage of William and Kate in 2011 and the upcoming nuptials of Harry and Meghan to examine whether the benefits justify the investment.
While the costs may seem extravagant – there are many benefits to the UK from Royal Weddings.
When William and Kate tied the knot in 2011, an additional 600,000 people come to London for the weekend – 60% from UK, 40% from overseas. While there they spent upwards of £107m. The added value to Britain’s ‘brand’ due to global media coverage worth approximately £1bn and more than 2bn people watched the ceremony globally
It wasn’t just visitors to London, the ONS reported that an extra 350,000 visitors travelled to the UK compared to the year before.
Tourism also flourished on the island of Anglesey in Wales, where the royal couple lived after the wedding. It’s estimated that it prompted a 20% increase in business in 2011.
In total, Harry and Meghan’s nuptials are projected to generate an amount in the region of £500m with £200m expected to come from tourism, travel and hotels
£150m will be spent by people having parties and celebrating and commemorative merchandise is projected to generate £50m
The wedding will provide the UK with around £100m in free marketing.
Airbnb has announced a projected total host income of almost £12m over the May weekend, with around 42,000 guests visiting the capital and surrounding areas to see the festivities.
THE COST & BENEFITS OF ROYAL BABIES
The arrival of a new member of the Royal Family is always greeted with fanfare across the globe. Cameras line up as hours often turn to days, waiting for the all-important first glimpse of the next little prince or princess.
This excitement translates into financial benefits for the UK as you’ll see with this look at the three most recent additions to the Royal line-up – George, Charlotte and Louis.
To give birth in the Lindo Wing on a standard one-night delivery package costs £5,900 with each additional night costing £1,175. If you opt for a deluxe room, you’ll be paying £6,275 up front and £1,550 for subsequent days. If you require a caesarean the price rises again to £7,435 for the first night.
The cost of all three of William & Kate’s Royal babies being born in the Lindo Wing is thought to be…
CLOTHING, FEEDING & BABY ESSENTIALS
It’s crucial that, even as small children, the Royals are dressed to impress. So, it goes without saying that the three Royal siblings are no exception.
EDUCATION & CHILDCARE
The schools attended by William and Kate’s children are elite and highly sought after. This, of course, comes with a hefty price attached.
Understandably, it’s not cheap to raise a Royal baby. From birth onwards, they’re afforded the best of the best. So how much does it cost to raise a Royal to adulthood? Based on numerous sources – this is the average figure:
VALUE TO THE ECONOMY
While the Royal children may cost a bundle to bring up – they also attract a lot of money into the UK. Here’s how much value they add to our economy…
- Prince Louis has already added £50m to the UK economy simply by being born through souvenirs, memorabilia and baby clothes.
- Prince George is currently estimated to be worth £2.4bn and his birth brought £75m into the economy.
- Princess Charlotte is the frontrunner with a net worth of £3bn (this higher net worth is through to be a result of the fashion influence she already wields) and brought in £100m when she was born.
HOW MUCH ARE THE BRITISH ROYAL FAMILY WORTH?
The annual cost of the British Monarchy was £4.50 per capita in 2017, the equivalent of just over 1p per day. However, this is only one of the many ways they amass their substantial funds. What makes up the total net worth of the Royal Family? A lot of it is a mystery but here is what we know…
THE ROYAL FAMILY’S EFFECT ON THE UK ECONOMY
It’s an unavoidable fact that the Royal Family costs the taxpayer money – that’s just the way the system works. The question is whether these costs are outweighed by the amount brought in through everything from tourism to ‘brand Britain’.
The chart above shows the costs as of the end of 2017. During the 2017/2018 budget year, the sovereign grant will rise first to £76.1m and then to £82.2m. The grant is calculated as a percentage of Crown Estate profits.
There is an ever-present debate about how much the Royals benefit the UK financially, with some seeing them more as a hindrance than a help. So, how much does the Royal Family of Great Britain bring into the UK economy annually?
- Coats of Arms
The prestige associated with coats of arms does have its financial benefits but only makes up a small fraction of the Royals’ economic value.
- Media Industry & Arts
The Royals’ contribution to the media industry and the arts allows Britain to thrive as a leading creative force on the world stage.
- Global Press Coverage
Global media organisations are always looking for an angle on the Royal Family, meaning that the UK gets a lot of press coverage and a brand boost as a direct result.
While it may be costly to send our Royals out on diplomatic missions, these trips do tend to increase trade and benefit the UK economy.
- Royal Patronage
Organisations such as Royal Ascot and the Royal Opera House are supported by the crown and generate substantial income.
- Royal Warrants
This income stream is down to brands who carry Royal Warrants such as Aston Martin, Prestat chocolates and Fortnum & Mason.
- Informal Endorsements
The most recent example of this is the ‘Kate Effect’, with people rushing out to emulate her fashion choices to the tune of £152m in 2015.
- Crown Estate Surplus
Any surplus revenue from the Crown Estate is placed straight into the UK’s treasury, and with the amount of property the Royals own, this has a significant impact.
The Royals are intrinsically linked the UK’s international image with many tourists planning their trips around visits to their iconic properties.
Unsurprisingly, the largest benefit provided by the Royals, at least in a fiscal sense, is the tourism they attract from around the world.
Visitors to the UK who are drawn in by British culture and heritage spend in the region of £4.5bn annually, out of a total overseas visitor spend of £17bn.
Approximately £550m of that amount is attributed to attractions and events connected to the Royal Family, past and present.
More than 60% of overseas visitors who come to Britain are likely to visit places associated with the Royal Family.
Top Three Royal Residences by Annual Visitors (2016/17)
- Windsor Castle: 1.5m visitors
- Buckingham Palace: 600,000 visitors
- Holyrood Palace: 400,000 visitors
HOW MUCH IS THE ROYAL ECONOMY WORTH?
If you subtract the official annual cost to taxpayers (£292.6m) from their contribution to the British economy (£1.766bn)