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The Prime Minister: Of course, the money is carefully overseen by the royal trustees, whose report this year gives a lot of detail about how the £7.9 million is broken down and about the various items of expense that it covers. The report also includes the numbers of employees within particular salary bands--a matter that has been raised on previous occasions. The report this year, therefore, contains a great deal more information than it normally does. Given the sum of money involved and what has been a very substantial reduction in real terms, I think that we can have every confidence that the money is being managed well and properly.

Sir Peter Tapsell (Louth and Horncastle): As new Labour tends to cheapen and vulgarise almost anything that it touches, will the Prime Minister do his very best to try to protect the institution of monarchy in this country from the influences of his spin doctors?

The Prime Minister: I think that that institution probably suffers more from prejudiced and rather unpleasant statements such as that. Given that I delivered the statement in perfectly good faith, and that I paid tribute to Her Majesty the Queen and the work that the monarchy does, I should have expected a slightly more gracious intervention from the hon. Gentleman.

Mr. Gerry Steinberg (City of Durham): Following from the question of my right hon. Friend the Member for Swansea, West (Mr. Williams), as the civil list is public expenditure, has the Prime Minister thought about allowing the National Audit Office to audit the accounts and letting the Public Accounts Committee investigate the result? That would be in line with practice on other public expenditure and would make the whole matter more accountable and, indeed, acceptable to Parliament, because people could then see that there was nothing to hide.

The Prime Minister: There really is nothing to hide, as one can see from the detail that is published today. A decision was taken about this at a very early stage. There has always been this question, because other expenditure is subject to scrutiny by the National Audit Office and the PAC. However, it was considered that the expenditure most closely associated with Her Majesty should be treated differently. I do not think that that is unreasonable, particularly in light of the fact that more detail has been given here today than has been provided before, and it breaks down literally every item of expenditure.

Because the vast bulk of the expenditure is on salaries, there is not a great deal to investigate other than seeing the salary levels. We have put the salary bands in the report so that people can see exactly how many people are employed, and how many are employed in each band. I am second to none in my enthusiasm for the work of the PAC, but I think that it will find that there are bigger issues to look into.

Mr. David Rendel (Newbury): If, as the Prime Minister says, the civil list expenditure is that most

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closely associated with the monarch, why are car transport costs included in the civil list, whereas air and rail transport costs are not? Why is one set of costs more closely associated with the monarch than the other?

The Prime Minister: It was decided at the time, back in the 1970s, to treat some of those expenses differently. Air travel and train travel costs, in particular, are incurred when heads of state go abroad and visit different countries. We can argue about the allocation of these costs and the way in which the expenditure is separated, but the actual amount set out for car costs is of a completely different order from those in relation to air and train costs. Again, because those tend to be more closely associated not with personal expenses, but with those incurred as head of state on visits, it was decided to make the allocation in that way.

Mr. Jeremy Corbyn (Islington, North): Does the Prime Minister agree that his statement is rather an understatement of the amount of money that is actually spent on supporting the royal family, and that he should include all the other expenditure within that amount? Since the royal family will end this 10-year period with an even larger surplus than they have at present, is it not outrageous that they are still charging the public to visit Buckingham palace throughout the summer? At the very least, access to the royal palaces should be free. In addition, as I understand that the Cabinet has had a frank and free discussion about royal accommodation, would my right hon. Friend care to comment on the possibility of relocating the royal family to some smaller and more modest accommodation in the future?

The Prime Minister: No, I cannot agree with that. As for the other expenses, such as grant in aid for the upkeep of palaces, those figures are all set up and subject to National Audit Office and PAC scrutiny in the normal way. The additional costs that are now to be borne by the Queen's civil list will amount to about £2.5 million a year over that period of 10 years--that is £25 million, which is a significant amount. If we look at this overall, to have kept the Queen's civil list static, in cash terms, for 20 years is a pretty good recommendation.

Mr. Crispin Blunt (Reigate): Nothing that the Prime Minister said in his statement came as a surprise. Why, even on this issue, when there is no controversy between the parties, could the Prime Minister and his advisers not resist spinning it to the newspapers and the "Today" programme first before coming to the House?

The Prime Minister: That is simply not the case. [Hon. Members: "It is."] It is not. The timing of the statement is precisely the same as it was back in 1990.

Mr. Gordon Prentice (Pendle): There are 58 royal bedrooms in Buckingham palace and no fewer than 78 royal bathrooms. Nine occupied royal palaces receive grant aid, leaving aside Sandringham and Balmoral. Given that the civil list helps to run occupied royal palaces, is there not a very real question about how many palaces the royal family needs to discharge its functions to the state?

The Prime Minister: Buckingham palace is, of course, a palace and there is likely to be more than one bathroom.

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I think that I am right in saying that the palaces receive more than 2 million visitors a year, which is a significant number. I would simply point out to my hon. Friend that since 1993, all the annuities paid to members of the royal family, apart from the Queen Mother and the Duke of Edinburgh, are reimbursed by the Queen.

Mr. Michael Fabricant (Lichfield): The Prime Minister rightly paid tribute to the work of the royal family. Will he join me in paying tribute to the people who work at the palace and to the considerable dedication that they show? He knows that more than 70 per cent. of the civil list is spent on salaries. Will he confirm that nothing in this settlement will result in any redundancies?

The Prime Minister: As far as I am aware, it will not, but obviously I do not know what plans the royal household may have. The hon. Gentleman is right to say that the vast bulk of the money is for salaries, which have to keep pace with inflation and, what is more important, with earnings in the public and private sectors as well. If he considers the figures overall, he will see that the royal family and the royal household have done a pretty extraordinary job of keeping the cost down.

Mr. Paul Flynn (Newport, West): Does the Prime Minister recall our debate about the loyal oath, in which 150 Members, I believe, expressed the desire to have the choice of an alternative form of oath--to the country rather than the monarch? He will be aware that many hon. Members qualify the oath that they take. As at least a third of the population believes that we should be considering an alternative form of head of state, and a growing group of young people feel that way, why can we only discuss these matters once every decade? The debate on the monarchy and the way in which it should be modernised is happening outside this place. Should we not also debate it here?

The Prime Minister: The House is entitled to debate whatever it wants and the oath is, of course, a matter for the House, but I do not believe that it should be changed. On the civil list, I also believe that the fact that I, as the Prime Minister, am making a statement on £7.9 million- worth of expenditure is opening up the matter for debate considerably.

Mr. Norman Baker (Lewes): I welcome the statement as far as it goes, which is probably the best that can be achieved against the background of the Civil List Act 1972. Was it not a serious misjudgment 10 years ago when the House agreed a settlement for a 10-year period with inflation built in at 7.5 per cent., which has resulted in the building up of a huge surplus? If it were allowed under that Act, should we not be recommending a cut this afternoon?

Furthermore, will the Prime Minister undertake a review of royal taxation to ensure that all members of the royal family are subject to the same tax rules as everyone in the House and in the country? Why is the Queen allowed to pay tax voluntarily rather than it being mandatory? How can the right hon. Gentleman explain to my constituents who are on income support why there are all these tax loopholes which, for example, allow the

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monarch to avoid inheritance tax when possessions are passed from one monarch to the next? Is it not time for a review of royal taxation as well?

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