BUCKINGHAM Palace was forced to back down yesterday after claiming that Scotland would cut its contributions to the upkeep of the royal family.

The story, which came from a Buckingham Palace source and appeared prominently on the front pages of many papers yesterday morning, suggested that the devolution of the Crown Estate would see Scotland hold back

£2 million from the Sovereign Fund that pays for the Queen and her family. The accusation was reported as fact, despite being flatly denied by both First Minister Nicola Sturgeon and the Treasury.

And last night the palace was accused of using a “diversion tactic” to distract from news of a £150m pound refurb to Buckingham Palace.

In a statement released late last night Sir Alan Reid, Keeper of the Privy Purse, said there had been a misunderstanding and that he been discussing a hypothetical situation. Reid said: “Yesterday’s media briefing on the Sovereign Grant report 2014-15 was intended to highlight some of the issues that may arise when the first review of the Sovereign Grant begins in April next year.

“The comments and observations were about a principle and never intended to be a criticism of Scotland or of the First Minister or to suggest that the First Minister had cast doubt on the continued funding of the monarchy.

“The principle is about what happens if profits from certain Crown Estate assets, such as those in Scotland, are not paid to the Treasury and the impact that may have on the calculation of the Sovereign Grant in future years. This question will form part of next year’s review.

“As we made clear at the briefing, Scotland contributes in many ways to the Treasury’s consolidated fund – out of which the Sovereign Grant is paid. We said explicitly that to imply Scotland would not pay for the monarchy was simply wrong and we accept unreservedly the assurances of the Scottish Government that the Sovereign Grant will not be cut as a result of devolution of the Crown Estate.”

Previously the palace had suggested that the Queen could lose around £2m as a result of the move which sees Scottish Ministers taking responsibility for the Crown Estate’s £216m of property in Scotland in April 2016.

The Times yesterday suggested that this was the start of “a quiet republican insurrection” by the SNP and was revenge for the Queen telling Scottish voters to “think carefully” about their decision in the referendum.

The First Minister also took to Twitter to correct Channel 4 News journalist Cathy Newman for repeating the line that Scotland was set to reduce money given to the Queen.

Sturgeon tweeted: “There is absolutely, categorically, no intention by @scotgov to cut S’land’s contribution to Sovereign Grant & never has been”.

Money from the Crown Estate does not go directly to the Royal Family. Money raised by the estate, which includes properties and land all over the UK, goes directly to the Treasury. In 2011, in a change to how the royal family was funded the Tory-Lib Dem Coalition created the Sovereign Grant which gave the royals a sum equal to 15 per cent of the profit made by the Crown Estate.

The Crown Estate, one of the largest portfolios of property in the country, last year generated a net profit of £285.1m.

A Scottish Government spokesperson said: “Scotland will continue to make the same financial contribution to the Monarchy as at present – there will be no reduction in the Sovereign Grant as a result of devolution of the Crown Estate.”

A spokesperson for the

Treasury said: “Scottish taxpayers will continue to fund a full and fair share of the Sovereign Grant, paid via the Consolidated Fund. The Grant will not be adversely affected by devolution – under the Sovereign Grant Act it cannot be reduced and the statutory review of the Grant will ensure that it continues to provide the resources needed to support the Queen’s official duties.”

Graham Smith from Republic, the campaign for a democratic alternative to the monarchy, said that the whole story felt like a “diversion tactic” .

Smith told the National: “The sovereign grant can’t go down. It makes no difference what the Scottish Government do. The sovereign grant comes from the Westminster government, which leaves me wondering where this story came from. It feels like a diversion tactic to move attention away from the cost of the royals and the renovation of Buckingham Palace.

“And it worked. The headlines this morning were about Scotland deserting the Queen. It’s quite worrying that the palace are spinning out this sort line and attempting to damage the Scottish Government.”

Renovations to Buckingham Palace are expected to cost around £150m. The building is is in need of new plumbing and wiring, and hasn’t been decorated since 1952.

Annual expenditure has risen £3.6m or 11 per cent over the past five years and a total of £3.8m was spent on the general maintenance of the royal estate, an increase of 12 per cent on 2013-14.

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