Queen Elizabeth II is the longest serving monarch in British history. She acceded to the throne on February 6th 1952, meaning that Queen Victoria’s record of 23,226 days, 16 hours and 23 minutes has already been broken. This milestone has already begun to reignite debates about the Monarchy’s future and whether it is an asset or a drain on the British economy. Brand Finance found out that the Monarchy’s value is at that point to be in excess of £44 billion (US$67bn). Brand Finance’s latest update to that figure suggests that as the Queen becomes Britain’s longest reigning sovereign, the institution that she leads is more valuable than ever. It is now worth just under £57 billion (US$87bn) and will make a net contribution to the economy this year of £1.155bn (US$1.767bn). But how are are monarchy and wealth related, really?
Monarchy as a Firm
Brand Finance has estimated the value of the Monarchy, often known colloquially as ‘The Firm’, as if it were a business. First, the annual contribution to the UK economy has been estimated. Costs such as the Sovereign Grant, security and maintenance of palaces have been netted off against sources of income including the uplift to tourism, the price premium commanded by brands with Royal Warrants, the surplus generated by the Crown Estate. This net annual contribution amounts to £1.155 (US$1.767bn) in 2015.When this contribution is projected into perpetuity, it has a net present value of £36.7 billion (US$56bn). To this are added The Firm’s tangible assets (the Crown Estate, the Duchies of Cornwall and Lancaster and the Crown Jewels) to reach a total of £56.7 billion (US$86.7bn): “A Royal Warrant can confer a significant premium to brands in certain industries such as luxury, food, sporting goods and fashion, yet are currently awarded at no cost to the holder. The introduction of royalties could provide a significant new revenue stream.
Austerity for everyone, as well the kings and queens
Income and Costs | |||
Economic Benefits | Notes | 2015 Value (£m) | Net Present Value (£m) |
Leisure, Tourism and Accommodation | Tourism revenue connected to the monarchy and its heritage | 535 | 17114 |
Royal Warrants | Total value of premiums commanded by Royal Warrant holding brands | 134 | 4235 |
Coat of Arms | Total value of premium derived from Coat of Arms by eligible brands | 13 | 423 |
Kate Effect | Uplift to fashion and other brands worn, used or otherwise endorsed | 152 | 4795 |
Charlotte Effect | Uplift to fashion and other brands worn, used or otherwise endorsed | 101 | 3197 |
George Effect | Uplift to fashion and other brands worn, used or otherwise endorsed | 76 | 2398 |
Estimated value of PR | Advertising value equivalent of special event and other coverage | 114 | 3597 |
Crown Estate | Operating surplus generated by Crown Estate for nation’s benefit | 288 | 9115 |
Total benefits | 1412 | 44874 | |
Costs | Notes | 2015 Value (£m) | Net Present Value (£m) |
Sovereign Grant | Set at 15% of Crown Estate revenues as per Sovereign Grant Act 2011 | -40 | -1338 |
Annuity for Duke of Edinburgh | -0.4 | -13 | |
State buildings used by royal family | -6 | -192 | |
Royal Collection net surplus | -7 | -217 | |
Royal Household pension scheme | -2 | -70 | |
Costs met by Government and Crown Estate | -4 | -121 | |
Cost of Lord Lieutenants | The Queen’s representatives in each county of the UK | -2 | -67 |
Duchy of Cornwall (lost revenue income) | -18 | -557 | |
Duchy of Cornwall (lost capital income) | -37 | -1165 | |
Duchy of Lancaster (lost income) | -15 | -460 | |
Duchy of Lancaster (lost income) | -1 | -19 | |
Legal costs to maintain royal secrecy | -0.2 | -6 | |
Security | -104 | -3293 | |
Cost to local councils | -22 | -687 | |
Total costs | -257 | -8206 | |
Net Economic Contribution | 1155 | 36668 | |
Tangible Assets | |||
Asset | Notes | Net Present Value (£m) | |
Crown Estate (Urban) | 6372 | ||
Crown Estate (Rural and coastal) | 1559 | ||
Crown Estate (Energy and Infrastructure) | 759 | ||
Duchy of Cornwall | 871 | ||
Duchy of Lancaster | 472 | ||
Royal Collection | Including the Crown Jewels | 10000 | |
Total Tangible Assets | 20033 | ||
Total Value of the Monarchy | 56700 |