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Kwasi Kwarteng’s latest blunder: Chancellor falsely states Crown’s income comes from civil list

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Kwasi Kwarteng suffered another blunder today when he confused the source of the Crown’s funding with a historic payment package that was abolished ten years ago.

The embattled Chancellor was grilled by LBC’s Nick Ferrari during his whooping U-turn after he and Prime Minister Liz Truss backtracked on plans to rip up the 45p income tax savings.

Asked by the veteran broadcaster whether the royal family should pay inheritance tax, Mr. Kwarteng explained how the sovereign’s income has historically been determined by parliament.

What was the Civil List and how did it work?

The Civil List paid for the monarch’s expenses as head of state and the bulk of the bill is made up of staff salaries.

The financing arrangement dates back to 1760, when George III struck a deal with the government over the Crown Estate.

All existing lands owned by the Crown were administered on behalf of the government, with excess revenue going to the Treasury.

In return, the sovereign would receive a fixed annual fee, determined by the parliament.

He said: ‘The royal family has a settlement with the government, they have the civil list. That has been happening for 250 years, 300 years.’

Further insisting on whether they should be treated as ordinary taxpayers in the wake of an estate passed on after a death, Mr. Kwarteng added: “We have a separate financing arrangement for them and it has been going on since the time of George III, I think.

“It’s something that’s very credible and they’re giving a lot to the country.”

The civilian list and grants for travel, communications and information were replaced by the sovereign grant in April 2012.

The earlier financing arrangement dates back to 1760, when George III transferred revenue from the Crown Lands to the government in exchange for the Civil List, which was established every ten years by Parliament and voted on by MPs.

Mr. Kwarteng’s confusion was noticed by eagle-eyed royal commentators, who quickly corrected his mistake.

Chris Ship, ITV Royal Editor, took to Twitter to point out the beleaguered Chancellor’s blunder.

He wrote online: ‘I know Kwasi Kwarteng has a lot to do with it, but he just told LBC that the royal family is funded by the civil list and is ‘since George III’.

“The Civil List was effectively discontinued in 2012 and replaced by the Sovereign Grant (a percentage of the Crown Estate’s profits).”

Controversial Chancellor Kwasi Kwarteng suffered another blunder today when he mistook the source of the Crown’s funding for a historic payment package that was abolished ten years ago.

The Sovereign Grant - the pot of taxpayers' money provided by the government to cover the costs of the Queen's official duties and residences - replaced the 250-year-old civilian list in 2012. Pictured: Buckingham Palace in February

The Sovereign Grant – the pot of taxpayers’ money provided by the government to cover the costs of the Queen’s official duties and residences – replaced the 250-year-old civilian list in 2012. Pictured: Buckingham Palace in February

The Sovereign Grant, which finances the staff and operating expenses of the monarch’s official household, is a single consolidated annual grant derived from an index percentage of the Crown Estate’s earnings and remained at £86.3 million for the financial year.

It is reviewed every five years by the Royal Trustees (the Prime Minister, the Chancellor of the Exchequer and the Custodian of the Private Exchange), and the financial statements are published by the Custodian of the Private Exchange.

The grant — the pot of taxpayers’ money provided by the government to cover the costs of the Queen’s official duties and residences — does not cover the costs of security and police requirements, nor the ceremonial duties of armed forces.

Earlier this year, it was revealed that the royal family’s finances had taken a hit of £14 million in the wake of the pandemic.

Expenditure rose to £102.4 million last year – a rise of 17 per cent – and most of it was siphoned off from the major ten-year program of construction work on Buckingham Palace.

For the renovations alone, there was a 41 percent increase in spending to £54.6 million.

Mr. Kwarteng's confusion was noticed by eagle-eyed royal commentators, who quickly corrected his mistake.  Chris Ship, ITV Royal Editor, took to Twitter to point out the beleaguered Chancellor's blunder

Mr. Kwarteng’s confusion was noticed by eagle-eyed royal commentators, who quickly corrected his mistake. Chris Ship, ITV Royal Editor, took to Twitter to point out the beleaguered Chancellor’s blunder

The Sovereign Grant, which finances the staff and operating expenses of the monarch's official household, is a single consolidated annual grant derived from an index percentage of the Crown Estate's earnings and remained at £86.3 million for the 2021/22 financial year.  year

The Sovereign Grant, which finances the staff and operating expenses of the monarch’s official household, is a single consolidated annual grant derived from an index percentage of the Crown Estate’s earnings and remained at £86.3 million for the 2021/22 financial year. year

The palace managed to raise a further £9.9 million through visitor openings and other money-generating schemes. But there was still a £14.6 million shortfall in royal finances, which was made up by a plunge into the palace’s ‘reserves’.

Sir Michael Stevens, the Keeper of the Prince’s Privy Purse, emphasized that the use of this savings was “not unexpected”.

He said the palace had been saving money from the beginning of the palace reservation project, when costs were lower, in preparation for when they would cost more.

But he admitted that like all major institutions, the palace had suffered as a result of the Covid pandemic.

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