U.K.'s Royal Family Hit by Inflation

LONDON, June 27, 2008 — -- Not even Queen Elizabeth II is immune to the effects of inflation.

Buckingham Palace released its annual accounts today, showing an increase of nearly $4 million in the Queen's spending.

So how much does it cost to keep Britain's monarch in business? A cool $79.5 million.

That seems like a lot of money until one considers that the Queen and the royal family cost British taxpayers $1.30 per person.

Still, in a time when housing prices are falling and most people are facing financial pressures in the U.K., every little bit counts.

And critics of the royal family are wondering if it's wise to spend millions on one family when so many other families are battling rising costs on everything from food to fuel.

"Well, what you make of this amount depends on whether you are a republican or a royalist, doesn't it?" Camilla Tominey, royal editor of the British tabloid The Sunday Express, told ABC News.

"The royals often argue that they are cheap," Tominey said. "When you think of the money they bring in, in terms of tourism, the number of visitors who come to the U.K. to see the palaces and so on, it does seem like good value for money."

This year, though, it was the Queen's own tours that cost the taxpayers money. Indeed, the amount spent on royal travel rose by nearly $1.2 million to $12.3 million last year.

Her most expensive engagement?

The state visit to America last May to commemorate the 400th anniversary of the Jamestown settlement, which cost a reported $824,000. A chartered plane for the trip totaled nearly $760,000.

Now, with fuel prices rising fast — the cost of a barrel of oil hit a record high of $142 today — such trips may have to be reconsidered.

In a statement released today, Sir Alan Reid, Keeper of the Privy Purse (who's also responsible for the management of the Queen's financial affairs), said that "expenditure on royal travel […] also increased in response to the number of overseas visits undertaken at the request of the Foreign and Commonwealth Office and U.K. Trade and Investment."

Although the government requested the royal family plan for more overseas visits to promote the U.K., Reid pointed out that the government needed to spend more at home for the maintenance of the royal palaces.

The government has frozen the Queen's budget for the next three years for the upkeep of Buckingham Palace, Windsor Castle and other royal palaces. That figure — nearly $30 million — has stayed the same since 1991.

It's part of what Tominey described as a "long-standing stand-off between the government and the royal family."

"The government needs to spend more on maintenance," she said, adding, "the royal palaces are national monuments."

In today's statement, Reid asked for an additional $63.5 million to fund "essential maintenance" of the palaces, not including the state rooms at Buckingham Palace.

Last year, news of masonry falling from Buckingham Palace made headlines in the U.K. press, as the Queen requested (and was denied) extra funds from the government to carry out urgent repairs.

One chunk of stone narrowly missed the parked car of the Queen's daughter, Princess Anne, as it fell from the East Wing facade.

The roof of the palace's picture gallery — which displays works by Rembrandt and Rubens — also is believed to be in trouble because of leaks. The Windsor Castle roof is on a list of things to be replaced, after years of being patched up here and there.

Despite the Queen's appeals, however, Tominey warned that it was unwise to expect any help from the ruling Labour government, especially in the current economic climate.

"Left-wing politicians aren't going to give money to the royal family," she said.

So, it appears that the 82-year-old monarch — like many other Britons cutting down on their spending — will have to make do with a limited budget this year. The leaking roof will simply have to wait.