Big news, everybody â the Duke and Duchess of Sussex have announced they are âstepping backâ as âseniorâ members of the royal family and will work to become âfinancially independent.â
If your reaction to this development was along the lines of âwut?â that is completely understandable.
The financial workings of Her Majesty and Co. are more than a little complex and their definition of âfinancially independentâ is almost certainly a far cry from the general populationâs.
So here are a few questions you might have, answered:
What are they actually doing?
A basic, but cracking, question. According to Harry and Meghanâs announcement, they are:
... step[ping] back as âseniorâ members of the royal family and no longer receive funding through the Sovereign Grant, [to] become members of the royal family with financial independence...
Yes, but what does that actually mean?
Letâs start with a bit of background about how the royals are financed. Since 2012, the Sovereign Grant has been the primary source of money used to fund the Queenâs official duties as monarch, including any work by other members of the royal family that supports these duties.
This includes things like official receptions, investitures and garden parties as well as the cost of travel involved in royal visits. For 2019-20, the Sovereign Grant has been set at ÂŁ82.4 million ($108 million).
For 2017-18, the profit generated by The Crown Estate â land and property across the UK â totaled ÂŁ329.4 million and was surrendered to the treasury. The Sovereign Grant is calculated as a percentage of that profit and handed back to the royals.
The issue of whether the monarchy represents taxpayer value for money is hotly contested. The total cost per person in the UK was worked out by the palace as ÂŁ1.24 each in 2018/19, and this has been rising.
But itâs worth pointing out that this is based on the Sovereign Grant alone. A combination of research and estimates from anti-monarchy pressure group Republic has identified potential âhidden costsâ of several times this â in 2017, it estimated the true cost to the public at closer to ÂŁ345 million, taking into account things like security, lost income, and the expense to local councils of running royal visits.
This also has to be balanced against the tourism revenues they generate, which according to one estimate totalled a whopping ÂŁ1.8 billion in 2017. Republic, unsurprisingly, contests this, saying the tourism would occur whether or not the royal family itself remained and that estimates have been highly speculative and based on vaguely worded surveys.
Either way, the Sussexes will no longer receive money from the Sovereign Grant for their formal office expenses. Their new official website, sussexroyal.com, said the grant had accounted for 5% of their office costs.
All the same, itâs unlikely the Sovereign Grant itself will be reduced as it is set to a statutory level, meaning the taxpayerâs bill wonât go down.
What about non-office costs?
This isnât that clear right now. The Sovereign Grant is also used to pay for Harry and Meghanâs official royal travel, and their website said they âproudlyâ carry out official overseas visits in support of the Queen, suggesting they will still continue to do so.
Who pays for the rest of their costs?
The Prince of Wales currently pays for the remaining cost of their public duties and some of their private costs from his Duchy of Cornwall income. Itâs not known if they will renounce all or part of this.
So theyâre going to get actual jobs?
It looks like it but they wonât be stacking shelves in a supermarket.
Jeff Jacobson, co-founder of the Talent Bureau speaking agency, told Bloomberg that Harry could command Barack Obama-level fees â more than $100,000 (ÂŁ76,330) per appearance.
There has been no announcement about any other possible roles. Harry is a former soldier and Meghan is a former actress so perhaps thereâs a modern reboot of Soldier Soldier in the works.
The pair are also about to launch their new SussexRoyal foundation but they will not benefit financially from this.
Will they still live in Frogmore Cottage?
They will continue to base themselves at Frogmore Cottage when in the UK, but itâs worth noting that âcottageâ is a bit of an understatement.
Taxpayers paid ÂŁ2.4 million to renovate Harry and Meghanâs official residence, which the couple moved into just nine months ago. As this money has already been spent, it would arguably be a bit of a waste if they moved out, to be honest.
Will they cost the UK taxpayer any more money after this?
Almost certainly. Stepping down as a senior royal doesnât mean disappearing into a life of anonymity and their highly recognizable faces will still need protecting â thatâs where some of the âhidden costsâ we mentioned above go.
Sussexroyal.com, referring to armed security by the Metropolitan Police mandated by the Home Office, said: âThe Duke and Duchess of Sussex are classified as internationally protected people which mandates this level of security.â
CORRECTION: An earlier version of this story did not take into account research and claims by Republic that the royal familyâs costs to the British taxpayer are higher than the Sovereign Grant, and stated that the grant is funded directly from the Crown Estate. We have also added context to the claim that the royal family generates ÂŁ1.8bn of tourism income.