The royal family gets a lot of negative press for being a drain on taxpayers' money – and with reports that the 2015 Windsor family’s budget ran to a whopping £35.7 million, courtesy of the Sovereign Grant, it’s no surprise. However, according to brand and business valuation agency Brand Finance the value of the monarchy to the British economy was estimated at £56.7 billion in 2015.
Yet while the value of the monarchy was put at nearly £57 billion, Brand Finance estimated that their net contribution to the UK economy for the same period was actually just £1.115 billion. This hardly insignificant figure is worked out after costs such as the Sovereign Grant, security and the upkeep of palaces are taken away from income such as the surplus generated by the Crown Estate (£288 million), Royal Warrants (£134 million) and monies generated from tourism.
But regardless of whether it’s gross or net income, it can’t be denied that the royals definitely contribute to the UK economy in more ways than one. The two biggest are naturally fairly obvious.
Tourism has always been seen as an area where the Royal Family add value to the UK economy, whether it’s a wedding, a birth or a Jubilee celebration the monarchy pull in the crowds. Brand Finances figures show that tourism connected to the monarchy and its heritage created £535 million in revenue for 2015.
According to accountancy firm PwC estimated wedding watchers delivered a staggering £107 million for London hotels, shops and restaurants. VisitBritain predicts that over 4 million extra visitors will continue to holiday in the UK for the next few years boosting the economy by an estimated £2 billion.
Speaking of the Royal effect on tourism, specifically the birth of a royal baby, Gordon Innes, chief executive of London & Partners, told The Telegraph: “While it’s impossible to quantify the effect the birth of a new royal baby will have on the number of tourists visiting London, it’s clear that London’s tourism is going from strength the strength, and its royal connections and attractions are key drivers that attract people from the UK and abroad to the capital.”
The 'Kate, George and Charlotte Effect'
From using British fashion house Alexander McQueen to design and make her wedding dress, to wearing high street brands to royal engagements, the Duchess of Cambridge has given the British fashion industry a helping hand ever since she stepped into Prince William’s life in 2003.
More than £152 million in income in 2015 was attributed to the 'Kate Effect', which is described as an “uplift to fashion and other brands worn, used or otherwise endorsed” by the Duchess. If Kate wears it we want it, and brands such as Reiss, Burberry and LK Bennett have all benefited from the Kate effect.
And it’s not just Kate’s fashion choices that boost the economy, her children do too. A staggering £76 million has been attributed to the 'George Effect' including sales clothing, accessories and souvenirs with his birth thought to have brought £247 million into the country in 2013.
Meanwhile the report reveals £114 million in revenue for 2015 was down to the 'Charlotte Effect'. Within days of her birth it was reported that Princess Charlotte had given an £80 million boost to the economy with commemorative mugs, t-shirts and more flying off the shelf.
That’s not bad for someone who’s not even one yet! And it has been predicted that the Princess could be worth a whopping £1 billion to the economy by the time she is 10 years old, predominantly from her impact on fashion – just like her mother!
While the Brand Finance report reveals the Royal Family significantly boosts the UK economy, the company’s chief executive thinks it could be further monetised, for example with the introduction of royalties as a new revenue stream to replace the current Royal Warrant which is awarded for free.
He concludes the report by saying: “Though the ‘monetization’ of the monarchy may sound beyond the pale to some, in straightened times of continuing austerity in Britain, the royal family may come under increasing pressure to pay its way in more ways than it does now.”
Whether that happens remains to be seen.