The King and the Treasury have been dealt a multi-million-pound blow as Scotland hangs on to soaring profits from wind farms on Crown-owned property.
Its devolved government raked in £60million profits over five years from the Crown Estate Scotland.
An even bigger windfall is in prospect for the estate and the SNP-led administration, with the potential for billions of pounds of investment in floating offshore wind farms.
But the Treasury in London does not currently have plans to raise the £6million it deducts each year from overall funding to reflect the transfer of Crown Estate income to the Holyrood regime.
The Crown Estate is owned by the monarch but they do not control it and the profits have been surrendered by every ruler since 1760 in return for a taxpayer-funded grant.
The £6million charge was the Crown Estate Scotland profit in the final year before devolution but that sum has since grown to £15.7million in 2021-22 – the most recent figures published.
Meanwhile, the value of the Crown Estate Scotland, which owns the seabed to 12 nautical miles out and half the foreshore, grew by 25 per cent last year to £568.2million. Its profits are meant to impact how the Royal Family is funded.
The monarch is given a sum equal to 25 per cent of the profits of the Crown Estate in England, Wales, and Northern Ireland. Until 2017 the Scottish profits were also included.
The monarch would have received £15million more since then if Crown Estate Scotland’s £60million profits were still included in the formula.
The prospect of money being “lost” led to a controversy in 2015 when Sir Alan Reid, the then Queen’s Keeper of the Privy Purse, warned that the Scottish profits would no longer be included in the calculation.
The warnings went unheeded and Sir Alan said he accepted assurances from Nicola Sturgeon, then First Minister, that the overall Sovereign Grant would not be cut as a result of devolution of the Crown Estate.
But the Scottish profits were not included in the calculation. Treasury officials have been quick to point out that Scottish taxpayers, like the rest of the UK, still fund the monarchy as the Sovereign Grant comes from the Consolidated Fund general tax pot.
A spokeswoman said: “Scottish taxpayers pay into the Consolidated Fund through general taxation, and therefore make a fair contribution.”
A review of the funding formula is being conducted by the three Royal Trustees of the Sovereign Grant – PM Rishi Sunak, Chancellor Jeremy Hunt and current Keeper of the Privy Purse Sir Michael Stevens – backed by Treasury officials.
There are no plans to include Crown Estate Scotland profits in a new formula which is expected to be pegged to a lower percentage of the profits in the rest of the UK to avoid the monarch benefitting from a huge surge in revenue from offshore wind.
The King has said he should not benefit from the windfall, but profits should go to the nation. The Sovereign Grant, currently £86.3million per year, would be £3.2million more if the Crown Estate Scotland profits were included this year.
New gates to honour late Queen
The King paid tribute to his late mother yesterday by viewing the Jubilee Gates, newly installed at Edinburgh’s Palace of Holyroodhouse to mark her 70 years on the throne. Charles and Queen Camilla unveiled a plaque honouring the construction of the gates, which were commissioned by the High Constables of Holyroodhouse, a group of ceremonial bodyguards, as a gift to the late Queen.
Tribute
The King was also presented with a book of historic photographs, which he said he would look at “immediately”. Roderick Urquhart, the organisation’s moderator, said they were “thrilled” with the gates, which will provide easier access to the area around Holyrood Abbey. They contain heraldic symbols from the four nations of the UK.
