Ministers have overhauled how profits from the crown estate are shared between King Charles and the taxpayer, before a multibillion-pound windfall from Britain’s offshore windfarms.
The Treasury said it would halve the proportion of the estate’s profits paid to the royal household through the sovereign grant, which will fall from 25% in recent years to 12% from next year.
However, soaring future profits from leasing the seabed to offshore wind developers mean the actual payout to the monarch will remain flat at £86.3m in 2024/25 – the same as this year’s grant.
The decision to adjust the cut from the sovereign grant was made by the royal trustees – the prime minister, Rishi Sunak; the chancellor, Jeremy Hunt, and the keeper of the privy purse, Sir Michael Stevens.
The crown estate generated record profits of almost half a billion pounds from Britain’s offshore windfarms in the last financial year, up by almost £130m from the year before, which reignited the debate over how much of the windfall should be shared with King Charles.
Hunt said: “For almost 300 years, kings and queens have surrendered the profits from the crown estate to the British people, and in return the government has provided a fraction of that to properly support the king in undertaking his official duties.
“The new sovereign grant rate reflects the unexpected significant increase in the crown estate’s net profits from offshore wind developments, while providing enough funding for official business as well as essential property maintenance, including completing the 10-year reservicing of Buckingham Palace”.
For the past five years the profits made by the crown estate – which controls a vast property portfolio across England and Wales – have been paid to the Treasury, which then returned 25% to the royal household in the form of the sovereign grant.
The sovereign grant was increased in 2017 from its previous level of 15% to help pay for extensive renovations at Buckingham Palace, which are likely to run until 2027.
The crown estate has agreed to increase its new chief executive’s pay by threefold in three years. The Guardian reported earlier this week that Dan Labbad was paid almost £1.6m last year, up by two-thirds from the year before, when he took home a pay packet of £945,000.
The remuneration is three times his equivalent full-year pay of £517,000 for 2019, when he stepped into the role, and almost £1m more than his predecessor, Alison Nimmo, was paid in her final year at the helm.
Molly Scott Cato, the finance and economy spokesperson for the England and Wales Green party, called the pay hike “a disgrace”.
“A wide-scale reform of the crown estate is long overdue to ensure that our national resources are managed with a focus on long-term sustainability and that such egregious remuneration at the public’s expense is ended once and for all,” she added.
• The headline and subheading of this article were amended on 20 July 2023 to better reflect the facts being reported.
