King Charles redirects £1bn windfarm profits towards ‘public good’
Energy agreements have generated windfall that would normally go towards monarchy
Energy agreements have generated windfall that would normally go towards monarchy
An RWE windfarm off the coast of north Wales. Photograph: Ben Birchall/PA
Alex Lawson and agencies
Alex Lawson and agencies
Thu 19 Jan 2023
King Charles has asked for profits from a £1bn-a-year crown estate windfarm deal to be used for the “wider public good” rather than as extra funding for the monarchy.
Under the taxpayer-funded sovereign grant, which is now £86.3m a year, the king receives 25% of the crown estate’s annual surplus, which includes an extra 10% for the refurbishment of Buckingham Palace.
Six new offshore wind energy lease agreements, announced by the crown estate on Thursday, have generated a major windfall for the estate, which would usually lead to a jump in the monarchy’s official funding.
How the Queen came to own the seabed around Britain
The monarch’s right to collect royalties from wind and wave power was granted by Tony Blair’s Labour government in a 2004 act of parliament. The approach is in contrast to the job of setting royalties and assigning drilling rights for oil and gas, which rests with the government.
But the king, who highlighted the cost of living crisis in his Christmas message, has requested that the extra funds “be directed for wider public good”, instead of to the sovereign grant, at a time when many are facing financial hardship.
It is not clear as to the exact amount of taxpayer funding the king has passed up, but it is likely to be many millions.
The crown estate – an ancient portfolio of land and property – belongs to the reigning monarch “in right of the crown” but it is not their private property.
Profits for the crown estate jumped by £43.4m to £312.7m in the year to the end of March, with the value of its seabed portfolio swelling to £5bn.
The portfolio also includes chunks of central London – the monarch is one of the largest property owners in the West End, including St James’s and Regent Street – as well as farmland, offices and retail parks from Southampton to Newcastle.
The crown estate is also responsible for managing the Windsor estate, which spans nearly 16,000 acres (6,500 hectares) and includes parkland and ancient woodland, as well as the Ascot racecourse.
The total value of the crown estate’s properties was estimated at £15.6bn in the most recent annual accounts.
The monarch surrenders the revenue from the estate – more than £312m a year – to the Treasury each year for the benefit of the nation’s finances, in exchange for the sovereign grant.
The king’s keeper of the privy purse, Sir Michael Stevens, who manages the royal household’s finances, has contacted the prime minister, Rishi Sunak, and the chancellor, Jeremy Hunt – his fellow royal trustees – to ask for “an appropriate reduction” in the percentage of crown estate profits used for the sovereign grant.
A Buckingham Palace spokesperson said: “In view of the offshore energy windfall, the keeper of the privy purse has written to the prime minister and the chancellor to share the king’s wish that this windfall be directed for wider public good, rather than to the sovereign grant, through an appropriate reduction in the proportion of crown estate surplus that funds the sovereign grant.”
The sovereign grant is based on funds two years in arrears, so any boost in crown estate profits and new percentage arrangements would not affect the grant until 2024-2025.
The sovereign grant covers the running costs of the royal household and events such as official receptions, investitures and garden parties.
The percentage increased from 15% to 25% in 2017 to cover the cost of a 10-year programme of £369m’s worth of repairs at the palace.
The grant goes up if crown estate profits increase, but it does not fall when they decrease.
The crown estate confirmed on Thursday it had signed lease agreements for six offshore wind projects that have the potential to power more than 7m homes.
Three of the six projects are located off the north Wales, Cumbria and Lancashire coast, and three are located in the North Sea off the Yorkshire and Lincolnshire coast.
Together they will pay about £1bn to the crown estate every year.
The successful bidders, which were announced last year, included Germany’s RWE Renewables, which won two licences at Dogger Bank, off the Yorkshire coast, and two from a consortium that includes the oil company BP.
The sovereign and the wider royal family have three main sources of income – the crown estate, the Duchy of Lancaster and the Duchy of Cornwall, with combined assets of more than £17bn.
King Charles has asked for profits from a £1bn-a-year crown estate windfarm deal to be used for the “wider public good” rather than as extra funding for the monarchy.
Under the taxpayer-funded sovereign grant, which is now £86.3m a year, the king receives 25% of the crown estate’s annual surplus, which includes an extra 10% for the refurbishment of Buckingham Palace.
Six new offshore wind energy lease agreements, announced by the crown estate on Thursday, have generated a major windfall for the estate, which would usually lead to a jump in the monarchy’s official funding.
How the Queen came to own the seabed around Britain
The monarch’s right to collect royalties from wind and wave power was granted by Tony Blair’s Labour government in a 2004 act of parliament. The approach is in contrast to the job of setting royalties and assigning drilling rights for oil and gas, which rests with the government.
But the king, who highlighted the cost of living crisis in his Christmas message, has requested that the extra funds “be directed for wider public good”, instead of to the sovereign grant, at a time when many are facing financial hardship.
It is not clear as to the exact amount of taxpayer funding the king has passed up, but it is likely to be many millions.
The crown estate – an ancient portfolio of land and property – belongs to the reigning monarch “in right of the crown” but it is not their private property.
Profits for the crown estate jumped by £43.4m to £312.7m in the year to the end of March, with the value of its seabed portfolio swelling to £5bn.
The portfolio also includes chunks of central London – the monarch is one of the largest property owners in the West End, including St James’s and Regent Street – as well as farmland, offices and retail parks from Southampton to Newcastle.
The crown estate is also responsible for managing the Windsor estate, which spans nearly 16,000 acres (6,500 hectares) and includes parkland and ancient woodland, as well as the Ascot racecourse.
The total value of the crown estate’s properties was estimated at £15.6bn in the most recent annual accounts.
The monarch surrenders the revenue from the estate – more than £312m a year – to the Treasury each year for the benefit of the nation’s finances, in exchange for the sovereign grant.
The king’s keeper of the privy purse, Sir Michael Stevens, who manages the royal household’s finances, has contacted the prime minister, Rishi Sunak, and the chancellor, Jeremy Hunt – his fellow royal trustees – to ask for “an appropriate reduction” in the percentage of crown estate profits used for the sovereign grant.
A Buckingham Palace spokesperson said: “In view of the offshore energy windfall, the keeper of the privy purse has written to the prime minister and the chancellor to share the king’s wish that this windfall be directed for wider public good, rather than to the sovereign grant, through an appropriate reduction in the proportion of crown estate surplus that funds the sovereign grant.”
The sovereign grant is based on funds two years in arrears, so any boost in crown estate profits and new percentage arrangements would not affect the grant until 2024-2025.
The sovereign grant covers the running costs of the royal household and events such as official receptions, investitures and garden parties.
The percentage increased from 15% to 25% in 2017 to cover the cost of a 10-year programme of £369m’s worth of repairs at the palace.
The grant goes up if crown estate profits increase, but it does not fall when they decrease.
The crown estate confirmed on Thursday it had signed lease agreements for six offshore wind projects that have the potential to power more than 7m homes.
Three of the six projects are located off the north Wales, Cumbria and Lancashire coast, and three are located in the North Sea off the Yorkshire and Lincolnshire coast.
Together they will pay about £1bn to the crown estate every year.
The successful bidders, which were announced last year, included Germany’s RWE Renewables, which won two licences at Dogger Bank, off the Yorkshire coast, and two from a consortium that includes the oil company BP.
The sovereign and the wider royal family have three main sources of income – the crown estate, the Duchy of Lancaster and the Duchy of Cornwall, with combined assets of more than £17bn.
Molly Scott Cato
THE GUARDIAN
Thu, 19 January 2023
Photograph: Steve Trewhella/Alamy
So the new king has reversed a thousand years of feudal convention and accepted that the value of the seabed rightfully belongs to his “subjects” rather than himself. That is the implication of the decision announced today saying King Charles will support handing over more of the crown’s share of revenues from the offshore wind boom to the Treasury, so the money can be spent in the public interest rather than for his private interest.
Thu, 19 January 2023
Photograph: Steve Trewhella/Alamy
So the new king has reversed a thousand years of feudal convention and accepted that the value of the seabed rightfully belongs to his “subjects” rather than himself. That is the implication of the decision announced today saying King Charles will support handing over more of the crown’s share of revenues from the offshore wind boom to the Treasury, so the money can be spent in the public interest rather than for his private interest.
Given his green reputation and his coming to power in the midst of the worst cost of living crisis in living memory, the new king was perhaps embarrassed that the expansion of windfarms would bring a large £1bn a year windfall to the crown estate, 25% of which would, under the current arrangements, have gone directly to the royal household as part of the annual sovereign grant.
It does feel rather strange to be welcoming this, as though we were forelock-tugging peasants rather than 21st-century citizens.
I have long been critical of the weird anachronism that means the crown estate, the monarch’s property portfolio, owns, and has the right to lease, the whole of the seabed around our coast.
Green party policy is that the crown estate should be considered as part of the national commonwealth and the value accruing from its leasing should be channelled into a green sovereign wealth fund.
As a Green economist I am keenly focused on the risk that the sources of revenue in the green economy are rapidly becoming enclosed. Since our future energy supply will rely heavily on wind and marine resources we need to ensure that the sustainability transition is a just one; questioning the ownership of the land on which these new windfarms are built is a crucial aspect of that.
The transition is an opportunity to build a fairer economy as well as a greener one. But more immediately, how should we spend this unexpected windfall for the public good?
I should tell you not to get too excited: we are talking about several billions, so nothing like enough to solve the problems with our transport or health systems, but still a useful sum to suddenly find down the back of the national sofa.
My own choice would be to invest it in some landmark rewilding projects, on land and in our marine environments, to symbolise the transformation of our relationship with nature that is so urgently needed, and that the king himself supports. Part of the deal might be requiring those whose land was restored and regenerated to agree to forego their ownership rights and vest that land to the public in perpetuity as commonwealth.
Such rewilding is urgently necessary in a country that has lost nearly half of its biodiversity since the Industrial Revolution and is the one of the most nature-depleted countries in the world.
The regeneration of just one species – marine sea kelp – could bring extraordinary benefits. Due to invasive fishing techniques and coastal development, about 90% of seagrass has disappeared over the past 30 years. Seagrass colonies provide habitats for a huge range of marine wildlife; they also act as carbon sinks. Using the windfall to fund their restoration could help to repair the damage done by the crown estate in delaying permission for such work in recent years.
In 2015 I was lucky enough to visit one of our few remaining seagrass meadows, off Studland Bay, in Dorset. I was supporting Dorset Wildlife Trust’s application for this wonderful habitat on the Isle of Purbeck to become a Marine Conservation Zone, an application that was being resisted by local developers. Thehaven it provided to two of our native species of precious seahorse was under threat.
While the money from windfarm leases might not be able to solve the climate crisis, it would make a huge difference to organisations like the Wildlife Trusts that protect our natural heritage on a shoestring.
While a few flagship rewilding projects would cheer our spirits and act as inspiration they would be only a drop in the ocean of the biodiversity crisis. More powerful by far would be to use the action taken by the king to raise more wide-reaching questions about the ownership of our land and seas.
After all, if we actually owned our natural world as a commonwealth, wouldn’t we be more willing and able to protect it?
Molly Scott Cato is professor of green economics at Roehampton University, and a former Green MEP
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