What kind of power do the British royals have, and where do they get their wealth?

Question

I'm a clueless American who is baffled by the fact that there are modern societies that still have some sort or rulers based on blood line. I'm assuming political power belongs entirely to the Prime Minister and his crew (when and how did that invade the monarchy?) and that taxes are collected for that government. What's the point of the royals today (other than tabloid news) and where do they get their wealth?

Answer 1

Best Answer - Chosen by Asker

You're broadly right. The British Royal family generally have few legal roles apart from the Queen herself, although they are immune from various laws like planning permission (local government has to authorise that any building work is safe, but the royal family can do what they like).

The Queen is in name the Head of State, the head of the armed forces and the head of the Church of England. In practice she is not allowed to actually exercise any authority or even display any preferences. The cost of keeping the whole royal family is estimated as £41.5m (about $70m?) per year, although this is not all as cash paid directly to them (only £7.9m) - a lot of it goes as money spent upkeeping the various estates. In addition there is the cost of security provided by the police and the army, which is not published.

However, this money is offset against money paid to the treasury in income tax, capital gains tax (in the UK, if you buy property cheap, and it goes up in value and you sell it expensively, this difference is subject to capital gains tax), and in earnings from various estates they own - these earnings are paid to the state in exchange for the £7.9m mentioned above. The Royal family own an enormous amount of land. One set of land alone, the Crown Estates, is worth £6.2 billion, and makes profits of around £200m per year which are paid to the state, which alone heavily outweighs the cost of the Royal family. In addition there are the Duchies of Cornwall and Lancaster which are probably worth another £1bn.

From our point of view, financially, it benefits us to have these holdings associated with the state rather than a private business, as a lot more money flows back into the state than it would do otherwise. Most of their wealth is based on stuff they inherited, or proceeds from the estates, or businesses based on the estates. Prince Charles owns a company that makes biscuits (Duchy Originals). They're quite nice!

Politically, the point of keeping the Queen as Head of state is to provide some sort of counterbalance, albeit even only theoretical, to the Prime Minister. Most countries have two houses of government and a Head of State; the US has the House, the Senate and the President. The British Prime Minister controls the House of Commons (roughly equivalent to the House); the House of Lords (even more roughly equivalent to the Senate) is much weaker than the Commons; so he actually has much more direct authority than the President of the US, so it's important that there is some counterbalance. The British PM cannot actually seize power as a dictator because technically the army belongs to the Queen and she has the authority to dissolve parliament. The Queen cannot seize power because it would cause a revolution.

This situation has basically evolved over the last 350 years or so because, as revolutions happened all across Europe and various Kings and Queens were beheaded, the British Monarchy looked at it and thought, we would rather give power back a bit at a time, than suffer a revolution and lose it all. The ball was started by our own Civil War, 1642-1651, followed mainly by a period of dictatorship, until we re-established a monarchy that had to listen to parliament in 1660. This gradual constraining of the monarchy has continued right up until 1992 when they started paying income tax.

So - what's the benefit of keeping them? People have different opinions and it kind of comes down to taste. From my point of view the finances are pretty even or actually profitable for the country. For me it's a matter of style. For me, there is no other person in the world whose title is as impressive as the King or Queen of England. For sheer grandeur and symbolism nothing can touch it. The President of the United Stated comes second - but to be honest, he's only going to be there for eight years, and there is a reasonable prospect that one day Sarah Palin could have that title.

I think history and symbolism are important, especially in trying to create a nation; trying to make millions of people who don't know each other unite under the same banner. That is why America has worked so hard to elevate the idea of the President to an almost religious status. If you have something that's richly symbolic and you throw it away it's hard to build it up again.

I'm not especially into these particular people. I'm sure they're no better or worse than a lot of other people. But the idea of the monarchy is so central to the idea of what it means to be British, that, at a time when we're struggling for an idea of national identity as it is, it would be too destructive to rip it out. And they don't actually do any harm or cost any money.

Source(s):

http://en.wikipedia.org/wiki/Finances_of_the_British_Royal_Family
http://en.wikipedia.org/wiki/Crown_Estate
http://en.wikipedia.org/wiki/English_Civil_War
http://www.duchyoriginals.com/

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Asker's Comment:

Wow so many good and detailed answers, I just had to go with the longest ;-) Sources are extra credit too. Thank you everyone!

Answer 2

The royal family has wealth inherited for over 30 generations. The wealth was achieved by right of conquest in 1066. However, in 1760 parliament took the bulk of the monarch's property away, and called it the "crown estate". The crown estate is run like a major international corporation. In exchange for taking this property, parliament agreed to pay the monarch a set amount of money in the form of grants for transportation (maintenance of a royal train, and a royal helicopter, and money to lease jets on a per need basis), palace maintenance, and cost of staff. They do not receive a salary per se, but they have large personal fortunes. The queen owns some palaces personally, and runs them as a business (income is derived from sale of souveneir, rental of buildings, farm goods, stud breeding, etc.).

Parliament declared their supremacy over the king by executing one in 1649. The monarchy did not exist for 11 years, but was restored. With the "Act of Succession" in 1701, parliament , by picking the next monarch, formally declared that they are the ultimate power in the country. Shortly after that one of the ministers in parliament began to form the special powers that we call the office of the prime minister.

Answer 3

"Power"? Virtually none. But they DO serve a purpose as head of state and her family.

They still exist because their ancestors were willing to evolve with time, to keep what they DID have. And because they are a national treasure. (well, the tabloids have a slightly different take on what "treasure" means than many others, but...you know...different strokes, right?)

Prime Ministers have always existed...they did not "invade" the monarchy.

The Royal family have money from investments made long ago, just like most wealthy people have.

Answer 4

Their powers are limited and their money comes from the various investments that they have. They are NOT the rulers of the U.K. There is not one iota of truth in anything that Richard has said. The ridiculous idea that they have banquets every morning paid for by catholics, just has to be a joke that no one in their right mind could ever take seriously, even as a joke it is devoid of any humour. The very idea that the Royal family despises catholics beggars belief.

Answer 5

Okay in most democratic countries the role of Head of State and Head of Government is split up. The USA is a bit of an oddball it puts them together. The Head of Government (normally a Prime Minister or Chancellor) wields political power while the Head of State (wields constitutional power and sometimes some political power). The Head of State is normally either a President or a Monarch.

Today the Monarchs role is limited to Constitutional, Ceremonial and Ambassadorial.

Constitutionally the Monarch has the right to be kept informed, advise and warn the government of the day. As a position they hold for life they can then pull on a life in the role to execute these duties. The Queen does this through regular meetings with government ministers, state papers and a weekly meeting with the Prime Minister. The Queen also retains some personal Royal Prerogatives these are to call and dissolve parliament, appoint the Prime Minister and give Royal Assent to bills so they can become law.

Ceremonially the Queen also has to rubber-stamp the use of other prerogatives like declaring war. She also acts as the amplification of the nation in a living breathing person and fulfils traditions and ceremonies like the state opening of parliament.

Ambassadorial the Queen greets foreign delegates and goes on regular overseas trips to maintain and strengthen good relations with other nations. She and the Royal family also champion many charities in the name of the nation.

The Monarchies personal wealth all comes from land. The Crown estates produce £220 million a year however this is all surrendered to the Government in exchange the government takes on all the expenses of the Monarch in their role as Head of State. Personal incomes comes from the Duchy of Cornwall (which goes to the Prince of Wales or to the Monarch if there is not one) and the Duchy of Lancaster (which goes to the Monarch). The Monarchy also has a variety of other estates and investments which are private.

The British Monarchy has evolved over time. Previously in England but also in the other constituent realms the Monarchs were forced by the nobility and the church to have parliaments which started off with just making sure the King did not act too tyrannical overtime it extended to represent the commoners and slowly weakened the power of the Monarchy. The English Civil war and the Glorious Revolution (not a violent one we are too British for that) were major transfer of powers to parliament. If you want to know more about them (http://en.wikipedia.org/wiki/Glorious_Re… and (http://en.wikipedia.org/wiki/English_Civ…

Answer 6

The monarch doesn't have any actual power. We have a constitutional monarchy, which means the monarch is subject to the laws of the country like everyone else.

Parliament has its origins a thousand years ago in the form of royal council. The Magna Carta in 1215 was established to prevent the king from having complete power - the king cannot levy or collect taxes without consent of the council. Over the years, Parliament progressively limited the power of the monarch ultimately culminating in the English Civil War and execution of Charles I, formation of the Protectorate (Crowned Republic) then the restoration of the monarchy with Charles II as a constitutional monarch with limited authority.

The royal family get income from the land they own and also some money from the government (through taxes) for expenses and upkeep of the royal estates. The royal family are actually net contributors to the exchequor because of what they pay in taxes.

Nowadays, the monarch is head of state and the frontline royals also act as ambassadors.

I think the problem with the US is that a President has to act as head of state, leader of the government and a politician. They are elevated to an almost religious figure, they have far too much power, imo. The difference with having a monarchy is you have a head of state that is not political, that is constant. The Prime Minister has less power than a President and does not have the pressure of being some god-like figure.

Answer 7

Nope. Power comes from the Queen, unlike in the USA were power comes up from the people.

In the UK, Canada, Australia, etc. (each with an independent Crown, but all held be the same individual), the Queen "reigns" not "rules" with the advice of Parliament. The PM has no actual power at all: simply one vote in the House of Commons. He is the leader of his party, which is the biggest one in the House (usually; the Queen could choose another as PM, but seldom does), so he can advise his MP's what to do, although he cannot compel them. Granted, the PMO does a lot, but the actual power still resides with the Crown, who will respect the wishes of the people as represented in Parliament, but who still holds the residual power.

Bills etc., must go through both Houses, and then to the Queen for Royal Assent. If she doesn't sign, a bill does not become law. In this, she is like your President. However, unlike your President, she appoints Judges, military officers, and members of the House of Lords (in the UK), the Senate in Canada, etc. This is her direct power, although she will do it on the advice of officials, often the Prime Minister. However, officially, it is her power that makes all this happen.

Other Royals have no power whatsoever. They may have an influence in society, but they have no actual political power.

As for money, she does get some from the taxes raised, but, most of her money comes from her investments, and business. She raises (and sells) racehorses for example, amongst other things. In fact, she pays more from her private monies to run the Monarchy than she gets from taxes etc. As part of his training, Charles received nothing from taxpayers, and had to survive on his income from the Duchy of Cornwall, which is mostly farms rented out to people. Other Royals work as well, in the military, or other places.

Being a monarchy is cheap though. 2009 was the last survey of it in Canada, and it cost $1.53 per person, per year to be a monarchy. The UK is similar; about 84 pence. To put this in perspective, the inauguration alone of Obama cost more than the entire cost of the monarchy in the UK that same year.

Answer 8

They basically leach money off of the good people of Britiain. Their powers are that they can be racist,uncouth and altogether more common as a whole family than anything you would see on a Jerry Springer show yet still take money from the very people they despise e.g Catholics who pay taxes to ensure they can eat sumptous banquets each morning whilst Catholics are bannished from the Royal family.

Answer 9

I am also American an can answer your question.
The royal family has personal wealth;the Queen isn't paid to be Queen.Her personal expenses come out of her personal wealth derived from investments and the Duchy of Lancaster.Royals are given business expenses through the Civil List http://www.royal.gov.uk/TheRoyalHousehol…
The Civil List pays for official expenses of The Queen’s Household, so that The Queen can carry out her role as Head of State and Head of the Commonwealth. The Queen and The Duke of Edinburgh are the only members of the Royal Family to receive an annual parliamentary allowance.
Grant-in-Aid http://www.royal.gov.uk/TheRoyalHousehol…
Is annual funding to meet the costs of official travel through the Department of Transport. The majority of Royal Travel expenditure pays for The Queen’s helicopter and charter and scheduled fix-wing aircraft.
A separate grant is voted by Parliament each year, through the Department of Culture, Media and Sport, to cover the upkeep of the Royal residences. Royal residences are owned by the state government and not by the royals.The Queen is responsible for her two houses that she owns-Balmoral and Sandringham.
Privy Purse and the Duchy of Lancaster http://www.royal.gov.uk/TheRoyalHousehol…
is a portfolio of land, property and assets held in trust for the Sovereign in his/her role as Sovereign. It is administered separately from the Crown Estates.
Its main purpose is to provide an independent source of income, and is used mainly to pay for official expenditure not met by the Civil List (primarily to meet expenses incurred by other members of the Royal Family).
Prince Charles gets money form businesses that he runs in the Duchy of Lancaster.
The other children get money from the Queen.
The Queen's job is explained here;she signs bills into action,advises Parliament,opens and closes Parliament,dissolves Parliament and calls for general elections,but she is not supposed to be politcal:
http://www.royal.gov.uk/MonarchUK/Howthe…
The British Sovereign can be seen as having two roles: Head of State, and 'Head of the Nation'.

As Head of State, The Queen undertakes constitutional and representational duties which have developed over one thousand years of history.

There are inward duties, with The Queen playing a part in State functions in Britain. Parliament must be opened, Orders in Council have to be approved, Acts of Parliament must be signed, and meetings with the Prime Minister must be held.

There are also outward duties of State, when The Queen represents Britain to the rest of the world. For example, The Queen receives foreign ambassadors and high commissioners, entertains visiting Heads of State, and makes State visits overseas to other countries, in support of diplomatic and economic relations.As 'Head of Nation', The Queen's role is less formal, but no less important for the social and cultural functions it fulfils.

These include: providing a focus for national identity, unity and pride; giving a sense of stability and continuity; recognising success, achievement and excellence; and supporting service to others, particularly through public service and the voluntary sector...
In addition, at times of national celebration or tragedy, The Queen publicly represents the nation's mood - for example, at annual commemoration of the war dead on Remembrance Sunday, or at celebrations for a national sporting victory.

The Queen also has an essential role in providing a sense of stability and continuity in times of political and social change. The system of constitutional monarchy bridges the discontinuity of party politics.

While political parties change constantly, the Sovereign continues as Head of State, providing a stable framework within which a government can introduce wide-ranging reforms.

With more than five decades of reading State papers, meeting Heads of State and ambassadors and holding a weekly audience with the Prime Minister, The Queen has an unequalled store of experience upon which successive Prime Ministers have been able to draw.