Valuing the Royal Family

Posted by Christie Malry on July 5, 2011 at 10:27 pm

Via the perennially stupid Bethemediauk, I'm alerted to a report by the Republic Campaign on the cost of the UK Royal Family. This claims that the true cost of our Royals is a startling £200 million, which they claim is enough to pay for 9,560 nurses or 8,200 police officers. In an extraordinary display of eye swivelling lunacy, the report shrieks that the Royal Family is one of the most expensive, wasteful and financially irresponsible institutions in the world. Which, in the wake of the global financial crisis, seems to be a triumph of cretinism over common sense.

Of course their estimate is, as the French would say, a total load of bollocks.

This is how they break down their £200 million figure:

First of all, the entire basis of the calculation is flawed. In saying that the Royal Family 'costs' £200 million per annum, and describes alternative things that this money could be spent on, it implies that one could free up £200 million of recurring resources by eliminating the Royal Family. But you couldn't. Because the estimate includes allocations of sunk cost, non-cash expenditure and omits the benefits of having a Royal Family (yes, there are some).

Sunk costs

Let's deal with the biggest, and stupidest, part of their estimate first. They claim that "security" costs us £100 million per year. But we're not surrounding the Royals with barricades made from £50 notes. We're protecting them with people - mostly police officers. So the Republic Campaign's argument is that we could sack 4,000 police officers who are currently spending their time protecting the Royal Family and, er, recruit 4,000 police officers to do something else. There simply isn't £100 million that's spent on the Royal Family that could be spent on other things without consequence.

It's worth noting that it's a basic principle that the supply of services to citizens, even royals, is based on their need rather than on any other basis. The Royal Family need greater protection than the rest of us, because of student lefty mongs and their predeliction for poking royals with sticks. And so we provide it to them out of the police service that is funded out of general taxation. Note that this principle underpins the entire welfare state, so to disagree with it is to argue that the entire welfare edifice - disability benefits, income support and housing allowances, etc. - needs to be demolished.

Non-cash expenditure

For the cost of the Queen's Civil List, they have taken the actual amount spent by the Civil List of £14.2 million. But this is the cash expenditure from the Civil List, not the amount by which it is topped up every year. That figure is £7.9 million per year, nearly half. So the current cost to the state of the Civil List isn't £14.2 million at all.

Omitted benefits

If we were to eliminate the Royal Family we would no longer be able to enjoy the benefits we get from having them. A big draw from the Royal Family is tourism, with foreigners apparently unable to resist a glimpse of our Windsors. The Guardian, not an obvious friend of the royalty, reports that the 2011 Royal Wedding alone produced a £2 billion boost for tourism - that's exports that we wouldn't otherwise have been able to generate without our Royal Family. The Diamond Jubilee in 2012 should similarly produce a boost for tourism. It's a fallacy to count the costs of the Royal Family without estimating their benefits. The Republic Campaign estimate is fatally flawed by its refusal to put a figure on their contribution to tourism and other industries.

There is also no mention of the fact that, since 1993, the Queen has paid income and capital gains tax on her income.

Other issues

There are other dubious estimates in the report, such as whether it is appropriate to treat the additional costs incurred by Romsey Council as representative of the costs incurred by a typical council during a Royal visit. 

Conclusion

I conclude that this is a hastily produced report that has not been subject to external verification or audit. It has allowed its nasty, bitter politics to undermine its message and, while there is a debate to be had as to the true cost of the Royal Family and whether that cost can be minimised, this report's contribution is of no value to that debate.

Given the way in which its message has been reported at length on Twitter, it is a deeply shabby and irresponsible report, and I have alerted the report's author, Graham Smith, to its errors. I await his response.