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Civil List

Volume 886: debated on Wednesday 12 February 1975

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With permission, Mr. Speaker, I should like to make a statement on the Civil List.

Section 5 of the Civil List Act 1972 requires the Royal Trustees to keep under review the annual expenditure of the Civil List and the sums available to meet that expenditure, and to report to the Treasury if at any time it appears that expenditure for the coming calendar year will exceed the sums available under the existing provision. The Treasury is required to lay any such report before Parliament.

That situation has now been reached, some years earlier than was expected when Parliament passed the 1972 Act. The Royal Trustees have reported to the Treasury that, after every effort has been made to secure economies in the administration of the Royal Household, expenditure on the Civil List has increased to £1,180,000 in 1974—an average annual increase of 16 per cent. since 1972—and is expected to increase to £1,400,000 in 1975, a further increase of 18½ per cent.

This does not represent any increase in real expenditure. About three-quarters of the expenditure of the Civil List is on wages and salaries, mainly of staff engaged in manual and clerical work. Wages and salaries in the Royal Household are wherever possible closely linked with comparable Civil Service rates, which are themselves negotiated with the Civil Service staff associations and unions. Pay increases are, therefore, within the TUC guidelines. In respect of this part of the expenditure, the increased provi- sion is required to meet increases in wages and salaries of existing members, officials and staff of the Royal Household. The remaining quarter consists of other expenses, which have, thanks to continuing economies in the administration of the Royal Household, risen by considerably less than the increase in the Retail Price Index since 1972.

It is estimated that by the end of 1975 the increase in these expenses—that is, other than wages and salaries—since 1972 will have been 32 per cent. On the other hand, by the end of 1975 salaries and wages may be expected to have increased by something like 70 per cent. over the three years in accordance with the Civil Service link.

The surpluses built up by the Royal Trustees since 1972, under the arrangements approved by Parliament that year, were exhausted in the course of 1974; indeed, it was only with the aid of a contribution of more than £60,000 by the Queen from her own resources that the expenditure for the year was covered.

It is, therefore, necessary to ask Parliament to approve an order under Section 6 of the 1972 Act increasing the amount to be paid from the Consolidated Fund from £980,000, the sum provided in the 1972 Act, to £1,400,000. The report of the Royal Trustees and the order are being laid before Parliament this afternoon; copies are now available in the Vote Office.

The Civil List now finances only the expenses incurred by the Queen in pursuance of her official functions and duties and includes no contribution to the Privy Purse, and the increase now proposed allows for no increase in expenditure in real terms—indeed, the reverse. Despite that, the Queen has intimated to the Government that, in view of the current economic situation, she thinks it right herself to make a further contribution from her own resources towards the increased cash requirement for the Civil List this year—that is, towards the £1,400,000.

Accordingly, Her Majesty has offered to contribute £150,000 towards the expenses of the Civil List in 1975. The Government have accepted this offer, which will reduce the actual net call upon the Exchequer in 1975 by that amount to £270,000. That means that the net provision by the Exchequer this coming year will be 27·6 per cent. above the 1972 provision made three years ago, and there have been three years of inflation since that time. I should like to express the Goverment's appreciation of the spirit which has prompted Her Majesty to make this gesture.

No increase is proposed for 1975 in the amounts of the annuities payable to certain members of the Royal Family under Section 2 of the Act, but the order increases from £60,000 to £85,000 the amount payable under Section 3(1) of the Act to the Royal Trustees for the purpose of making contributions towards the expenses of the performance of Royal duties by those members of the Royal Family for which Parliament has not made other provision.

The increases provided by the order are expected to meet the requirements of the Civil List for 1975, but do not provide any surplus for use in meeting deficits in later years. It will be necessary to seek parliamentary authority for a further increase in the Civil List provisions next year. Indeed, it is evident that, in a time of rapidly rising costs and prices, the traditional system of settling the Civil List by legislation at relatively infrequent intervals becomes unworkable.

The Government therefore propose, with the Queen's agreement, to seek the authority of Parliament to finance future increases in the provision for the Civil List and in the other payments authorised by Civil List Acts from 1976 onwards by means of a grant-in-aid made to the Royal Trustees by the Treasury out of moneys provided by Parliament. Grants-in-aid made in accordance with this arrangement would be included in Estimates and voted by Parliament in accordance with the normal procedure of Supply.

I will, with permission, circulate in the Official Report a more detailed note of the background to the increased provision now being made and of the basis on which Civil List provisions would be adjusted in future under the proposal to which I have just referred. The House will, of course, have opportunities not only of a debate on the order to which I have referred, which is subject to the negative resolution procedure, but also of discussing these matters more fully when the necessary legislation is introduced in due course.

Is the Prime Minister aware that the Opposition welcome his statement and agree that proper provision must continue to be made for the Royal Household and the performance of its official functions? This is our most precious asset.

In view of the inflationary conditions prevailing, which affect the Royal Household and its staff as much as anyone else, we believe that the time has come to take a look at the way in which we provide for the Civil List. We shall, of course, carefully examine any legislation which the right hon. Gentleman chooses to lay before the House.

With your indulgence, Mr. Speaker, may I say that I know that I speak on behalf of all my right hon. and hon. Friends when I congratulate the right hon. Member for Finchley (Mrs. Thatcher) on her outstanding success in being elected leader of her party. We wish her happiness in and enjoyment of a life which she knows she can expect to be exciting but sometimes arduous and difficult. From a study of the right hon. Lady's speeches, I have formed the impression that there may well be a deep gulf between her and me in our respective political philosophies, but, having worked closely with her three immediate predecessors, as I have, I know that political disagreement between us need not mar the work that we have to do together in Parliament, and I look forward, as I hope she will, to the meetings behind your Chair, Mr. Speaker, and to the informality and, to judge from my experience with her predecessors, the intimacy, which such meetings afford.

I apologise to the right hon. Lady. I did not answer the very important questions she put to me. That is an oversight. I thank her for what she said at the beginning. It is absolutely right that the House should have not only abundant time to debate these matters but abundant time to think about them. That is why I think that the legislation will be best introduced very much later on this year so that hon. Members in all parts of the House, whatever their views, can give thought to them. As the right hon. Lady says, we must think about this whole question.

There was an all-party Select Committee three years ago of which I and others were members. We went into these things very fully indeed, as the right hon. Lady knows. Speaking for myself—other hon. Members may form a different view—on the whole I think that the right decision was taken at that time.

I know that it is important not to speak too often from this Dispatch Box, Mr. Speaker, but may I respond to the Prime Minister's kindness? I know that we shall have hard things to say to one another across the Dispatch Boxes, but I hope that we shall be able to keep the mutual respect of keen antagonists which I think is in the best interests of parliamentary democracy.

Is the Prime Minister aware that the right hon. Lady appears to have bowled him over at least through half of his questions? Whether that is a sign for the future I know not. Is the Prime Minister aware, further, that it is singularly appropriate today to congratulate the right hon. Lady on becoming the first lady of this House, which we hope is not a contested position, at least for the immediate future?

Does the right hon. Gentleman remember that some eight years ago he was kind enough to assure me that the relationship between party leaders was one of warmth, friendliness and total understanding? We hope that the right hon. Lady will live to enjoy that relationship.

Would the right hon. Gentleman agree that inflation inevitably hits any Head of State under whatever system it is operating, and the Head of State of this country is not immune from those processes? Would he also bear in mind that some of us who sat on the Select Committee on the Civil List believe that the present system is not only psychologically unfair but is totally misleading?

Will the Prime Minister again have a look at the Crown estates, which admittedly have the benefit of having been freed from death duties but which none the less are surrendered to the Exchequer at the beginning of each reign? In 1970 those revenues were as much as £3½ million. Would he consider the possibility of those revenues being paid into a joint Exchequer board for the actual expenses which the Chancellor of the Exchequer, and perhaps an official from the Royal Household, could agree, as the Inland Revenue does already in other matters, were wholly and properly incurred in the discharge of the Royal functions and see that this surplus was paid into the Exchequer each year? That would be much more accurate and much more fair.

Finally, so that we get these matters into perspective, will the Prime Minister confirm that the cost of discharging the functions of the Head of State of this country is slightly less than the cost of running the Embassy in Paris?

I thank the right hon. Gentleman. He is, of course, right when he says that inflation hits Heads of State in common with everyone else. In fact I think the more accurate phrase to use is that it hits any large employer. The increase referred to in the statement which I made this afternoon, which is required because of the statutory requirement of the report by the trustees, is largely because of wages and salaries. I am sure no hon. Member begrudges the fact that the Royal servants received roughly the same wages and salary increases as those in comparable work and in comparable—in many cases the same—trade unions. No one disputes that.

The right hon. Gentleman was right when he said that this cannot be regarded as an increase in pay, notwithstanding the rather tendentious headlines we have seen about "Increase in Queen's Pay". It is not an increase in pay. It is not an increase in salary. The Queen has received no salary since the 1972 Act. It is in fact a reduction, not an increase, in the real value of the finance made available. In part it reimburses her as a very large employer on behalf of the nation for what she in an inflationary situation over three years has had to pay in increased wages and salaries.

Would my right hon. Friend agree that there was certain information about the effects of the Royal immunity from taxation which was not fully available to the Select Committee three years ago and which would be relevant and should be available to Parliament if we are to legislate further on this matter?

I know my right hon. Friend's feelings on this matter. Indeed, he has spoken to me about it. It is true that the Select Committee did not receive certain information on this matter, though I think that most hon. Members were able to make a fairly clear assumption about these things. The Select Committee considered the question of tax liabilities. As I have said today, without any question of tax there is a voluntary contribution from the Crown—from the Queen's own resources—to the £1·4 million which is contained in the order.

Is the right hon. Gentleman aware that his statement today will go some way to deal with the grossly unfair and misleading remarks which have have been made outside? Does he agree that since the Crown surrendered various rights in exchange for the Civil List, the State has made a handsome profit out of the Royal Family, quite apart from the enormous debt that we owe them as ambassadors for Britain and the Commonwealth throughout the world?

Is the Prime Minister aware that the vast majority of Members on this side will be appalled at the statement that he has made this afternoon, and that I suspect that the vast majority of our supporters outside will share that view?

Does the Prime Minister know—I am sure that he does—that there is a tax-free income available to the Crown of not less than £300,000 a year from the Duchy of Lancaster which, if it were taxed, would be more than £14 million a year, and that that is likely to increase over the next few years? Does he not think that it would be desirable for us to return to the principle of having a Select Committee to go into all the details instead of this proposal being passed by an order of the House which we shall not have the opportunity to amend?

Will not the Prime Minister accept—[HON. MEMBERS: "Too long."]—that the whole of the Parliamentary Labour Party took the view, when the Civil List was debated, that we should establish a Department of the Crown—in other words, treat it as another Department of State with an annual Vote? His proposals this afternoon fell very short of that. We knew that he was a member of the establishment, but he does not need to go on all-fours to prove it.

On a point of order, Mr. Speaker. Would you give me some guidance? Should not the hon. Member for Fife, Central (Mr. Hamilton) have declared an interest in the subject to which he was speaking, in that he has gone out of his way to seek publicity for a book which he has published about the Royal Family and he is now making use of the House of Commons in order to further the sales of his own creation?

It is not a convention of the House that interests have to be declared during Questions.

The views of my hon. Friend the Member for Fife, Central (Mr. Hamilton) on this matter are well known and have been well canvassed over many years. Indeed, he has every right in a free country, as I said of another politican yesterday, to speak for himself and some others. But he does not have the right to claim to speak for the majority of the British people. Naturally, I do not accept some of his remarks. I know how strongly he feels and it will perhaps be better for me to pass them by.

My hon. Friend referred to the Select Committee of which he and I were both Members and in which we played a considerable part together.

My hon. Friend has always been a full-timer on this subject. Some of us have to spend time on other subjects.

My hon. Friend did not point out that in the debates on the Bill that followed the Select Committee, the procedure under which I have to take action today, as required by law, was not contested by a vote called by either of the Front Benches of the major parties or by him.

Perhaps my hon. Friend was away. Some of us were full-timers at that time.

If my hon. Friend was in his sick bed, I understand and withdraw that remark.

My hon. Friend will be aware that, in his absence, even those whose support he claims did not move an amendment to the Bill relating to the procedure under which my right hon. Friend the Chancellor of the Exchequer and I are required to act.

I was interested in what my hon. Friend said, because the point was pressed in our discussions. Incidentally, in most votes in the Select Committee he and I voted on the same side, but perhaps for slightly different reasons [HON. MEMBERS: "Oh."] I am not accusing my hon. Friend of guilt by association. I am just saying that we did.

My hon. Friend suggests that the Royal Household should be treated as a Department of State. I think he will realise the implications. If it were a Department of State—in other words, an employing Department—with 75 per cent. of its total expenditure being staff costs, it would be automatic for that Department to come to this House to ensure that there were votes of sufficient money to pay those wages and salaries.

Does the right hon. Gentleman agree that, even after the increase that he is proposing, the cost of our democratic monarchy is far less than that of most of the corrupt and despotic dictatorships of Eastern Europe which are so warmly supported by his hon. Friends behind him?

The hon. Gentleman's concluding words are typical of the nonsense that we get from some hon. Gentlemen opposite. I do not accept the words that he used. I thought that this House wanted good relations with the Soviet Union and Eastern Europe. Some of us hope to do something to help those good relations tomorrow. I do not intend, while I am in Moscow, to make any inquiries into the total cost of the administration of the Head of State office.

Does the Prime Minister agree that most people in this country believe that the services of the Royals, even at the expenditure of such moneys, are cheap at the price if they prevent the emergence of populists such as President Powell or President Wedgie Benn?

My hon. Friend is the second of those behind me to parade his favourite obsession this afternoon.

My hon. Friend had a Shadow job once. I have the greatest regard for my hon. Friend. Indeed, I remember when he acted as sponsor to the would-be President Taverne. Leaving aside the concluding words of my hon. Friend's remarks, which he read beautifully—he needs a new script writer, if I may say so—I agree with his opening words.

On a point of order, Mr. Speaker. Even from my right hon. Friend, for whom I have such high regard, I cannot accept the accusation that I ever read my questions or that anybody writes my scripts.

That was the point. I apologise to my hon. Friend. I was not suggesting that he was reading his question. That would be out of order. I was saying that I thought that he was following his own script. When I suggested that he should change his script writer, I meant that he should have someone other than himself to write for him.

Since the Labour Party is so concerned with the public expenditure consequences of what the Prime Minister has announced, may I ask whether he is aware that the salaries alone, not counting other expenses, of the additional 250 civil servants to be recruited to do the unproductive paper work of the National Enterprise Board will cost more than double the entire cost of the Royal Household? If hon. Gentlemen opposite are concerned about public expenditure, will the Prime Minister remind them that in terms of value for money we do a great deal better from the monarchy than we shall do from all these new retainers at the court of King Wedgwood Benn?

The hon. Gentleman is now the third hon. Member to parade his well known obsession. The hon. Gentleman should just have stood up and bowed and we would have known what he wanted to say. What he said does not arise from the statement that I made this afternoon. I hope that we shall long continue to hear the hon. Gentleman from the Opposition back benches.

Does my right hon. Friend accept that, despite the large amount of money involved, contrary to popular belief many employees of the Royal Household and estates are not getting anything like the increases recommended within the TUC guidelines? Does he also accept that, as the Royal Household and estates represent such a large proportion of our national resources, now is the time to reconsider seriously the productivity and purposes of those estates and whether we can devise some means of putting them to better use or increasing their productivity rather than having unnecessary similar statements at such frequent intervals? Is there not a case for having a fresh look at the position of the monarchy and the purposes of the Royal estates in future?

I thank my hon. Friend for what he said. It is a fact that where comparability can be established and demonstrated—many employees of the Royal Household and estates are members of the same trade unions as those employed in other Civil Service or quasi-Civil Service jobs—the employees are given the same conditions and payments as those in the Civil Service proper. They are not civil servants, but they are treated in that way.

Over the years the Civil Service has scrupulously followed both the statutory controls of the previous Government and the TUC guidelines, and this example has been followed in the determination of the salaries and remuneration of comparable grades at the Court. My hon. Friend says—and I should like to know more about this—that he thinks that on the whole the employees concerned have been unfairly treated compared with people doing comparable work—work which I think is described in the Civil Service by the horrible word "analogues". If that is so, it still further strengthens the case for enabling Her Majesty the Queen, as employer, to pay those who do a thorough job of work for her in accordance with what is regarded as reasonable remuneration.

Following is the information:

Section 1(1) of the Civil List Act 1972 provided for the payment of £980,000 a year from the Consolidated Fund for the Queen's Civil List. That sum exceeded the annual expenditure at that time. The Act provided for surpluses to be accumulated by the Royal Trustees and applied to meet deficits in subsequent years. At the time when Parliament was considering the 1972 Act it was expected that the provisions in the Act would suffice to cover expenditure for a period of about five years.
When the position was reviewed at the end of 1973 it was estimated that the existing provision under Section 1(1) of the Act, together with the surplus accumulated from 1972 and 1973, would suffice to meet Civil List expenditure in 1974 and 1975. In the event, however, costs and prices have risen faster than was foreseen. Despite continuing economies in the Royal Household, Civil List expenditure in 1970 rose to £1,180,000, which was met as to £980,000 from the Consolidated Fund grant for the year, as to £137,000 from the accumulated surplus at the disposal of the Royal Trustees (which was thereby exhausted), and as to £63,000 by Her Majesty herself from her Privy Purse.
The legislation which the Government propose to introduce for the future would allow the payments authorised under the Civil List Act 1972, as amended by the order now being laid before the House, to be paid out of the Consolidated Fund under the authority of the Civil List Acts, and would authorise the Government to pay such additional amounts as might be required from 1976 onwards to be provided by means of a grant in aid to the Royal Trustees out of monies provided by Parliament.
It would be the Government's intention that, in so far as the provision was to meet expenditure on wages and salaries in the Royal Household, it should be adjusted each year to take account of pay increases negotiated for the Civil Service on the basis of the agreed and established pay links; and that, in so far as the provision was to meet other expenses, it should be adjusted to take account of movements in prices. But the adjustment would not be automatic: this system of providing for increases in the Civil List in the estimates would enable the amounts of the provision to be adjusted to take account also of changes in the level of expenditure in real terms, reflecting, for example, changes in the pattern of the official activities of the Royal Family.