Phillip's presentation on 'Is the Queen a Georgist' was full of economic insights into how the land game drives the business cycle.
A week or so ago, full delivered a presentation to the 126th Annual Henry George Dinner.
The speech is economics based. Phil reveals that the Queen, as Sovereign of the UK, pays a significant land rent to the UK Treasury. The Queen’s property company - The Crown Estate is not part of the Queen’s private wealth as it always passes from one sovereign to the next.
The Crown Estate:
delivered a record of £328.8 million to the Treasury last year, up 8.1 per cent on 2015. In the past decade it has returned more than £2.6 billion to the exchequer.
The Queen receives a Sovereign Grant (£42.8m last year) from those £328.8m in land rents paid to government. Every five years the grant repayment rate is reviewed with percentages varying from the current 15% to 25% in 1919 to meet the extra cost of modernizing Buckingham Palace.
News media tends to focus its lens on the size of these sovereign grants.
More attention should be spent on the leadership the Queen demonstrates by paying land rents. Let’s take a look at the numbers.
The Crown Estate’s capital valuation is currently £13.1 billion. In order to deduce the percentage of her holdings paid as land rent, we need to estimate the land component of the Queen’s estate. Land typically accounts for some 70% of mortgages. With many of the Queens most valuable sites commercial property, we conservatively apply a 60% land value ratio to her total holdings.
That equates to a land value of £7.86 billion.
The intriguing question for Georgists is to calculate the Queen’s effective land rent rate. We can do that by dividing £7.86bn by £328.8m to find a 4.2% repayment rate.
Let us reiterate that. The Queen pays an effective land rent of 4.2% on the value of her land holdings.
Listen on to find out more..