Buckingham Palace has been considerably updated in the decades since, largely thanks to Prince Philip. After his wife became queen in 1952, Philip had wanted them to remain living in Clarence House. The palace, recalled Mike Parker, Philip’s private secretary, “seemed to him the coldest and most unfriendly place to raise a young family and the Queen quite agreed. She was delighted with the idea.”5 Winston Churchill, the prime minister, was opposed, insisting that Buckingham Palace was the centre of empire and this was where the royal family should live. Philip was forced to back down, but in the years that followed he devoted considerable energies to making it a more modern and comfortable place.
Various insights into the day-to-day reality of royal life in the decades since have been provided by latter-day “Crawfies”, the various servants or royal hangers-on who have attempted to cash in on their connections, or from the occasional tabloid stunt. In 2003 for example, an undercover reporter from the Daily Mirror spent two months working as a footman at Buckingham Palace, taking photographs of royal bedrooms and other private areas which revealed a rather dubious royal taste in interior design, as well as some curious insights, such as that the royal cornflakes and porridge oats are put on the breakfast table in Tupperware containers. Further amusement was provided for the press a few years later by the publication of a photograph of an old white plastic tray on which, it was claimed, the Queen’s breakfast of tea, white toast, butter and jam is brought to her bedroom every morning at eight o’clock.6
The conclusion is obvious: despite the Queen’s vast wealth, her lifestyle has little in common with that of a Russian oligarch or a Hollywood star. She and Prince Philip instead exhibit the kind of parsimony traditional to the British upper classes, who think nothing of sitting down on a broken chair or wearing a worn jacket. Philip, for example, seems quite happy to be seen in public in trousers more than fifty years old – albeit taken in by his tailor to reflect current fashion – or a Royal Naval uniform, vintage 1947. It is merely important that such items, however old, should have been of good quality to start with. “Counter-intuitive as it may seem, and notwithstanding the vast excesses of luxury into which they were haplessly born, the Queen and her kind specialize in a kind of inconspicuous non-consumption,” commented one observer. “Understand this, and everything else about the Queen makes perfect sense.”7
Such thrift does not extend to the size of the royal staff, however – a legacy of the past when servants were cheap. In all, the royal household comes to 1,200. A glimpse of the scale of Prince Charles’s entourage was provided by evidence at the trial in 2002 of Paul Burrell, long-serving butler to Princess Diana, on charges of theft – which then collapsed. The heir to the British throne, it emerged, had a team of four valets so that one is always available to lay out and pick up his clothes, a servant to squeeze his toothpaste onto his brush, and another who once held the specimen bottle while the Prince gave a urine sample after he broke his arm. Such revelations were acutely embarrassing at a time when the royal family was trying to present itself as reinvented, modernized and scaled down. Even Queen Elizabeth was said to have been appalled at the degree of Charles’s profligacy, reportedly believing the “amount of kit and servants he takes around is grotesque”.8 The Queen might be better off looking to her own household: the previous Christmas, during separate trips to Sandringham, Charles took three butlers and four cooks, while his mother brought along eleven butlers and twelve chefs.
More embarrassment for Prince Charles came from a book on royalty by Jeremy Paxman, a well-known BBC current-affairs presenter, published in 2006, which claimed the heir to the throne was so fussy about the boiled egg he eats after a day’s hunting that his staff cooks seven and has them arranged in a row, in increasing order of hardness, so if one proves too runny, he can choose the next one along.9 Clarence House usually refuses to comment on what it considers “personal matters”. This particular accusation of profligacy must have hit home, however: within hours of the allegation appearing in a newspaper serialization of the book, a spokeswoman for the prince declared, “The story about lots of eggs being boiled is not true.”10
Living on such a scale – even if eating only one boiled egg at a time – costs a lot of money, which means the financing of the monarchy both in Britain and elsewhere in Europe is a complex and often controversial issue that over the course of the years has regularly been tied up with broader political questions.
In Britain, whose monarchy is by far the costliest to maintain in Europe, the publication of the royal accounts every June is typically accompanied by pronouncements by palace officials of the good value that the institution represents. The year 2011 was no exception: the cost of maintaining the Queen and the rest of the royal family in the year up to that April had fallen by £1.8 million to £32.1 million – a total cost of 51p per person, down 3p from the previous year, it was announced. “The Queen is very keen that the royal household should continue to reduce its expenditure in line with public-expenditure reductions,” declared Sir Alan Reid, keeper of the privy purse,11 though there were limits to what more was possible after a nineteen-per-cent fall in expenditure in real terms over five years. There was a difference, however: the release of the figures coincided with the drawing up of a new formula that would change fundamentally the way in which the monarchy is financed.
For the past two and half centuries, the main element of royal financing has been the Civil List, which is intended to cover expenditure related to the Queen’s duties as head of state. About seventy per cent of this is spent on staff salaries, although it also meets the cost of official functions such as garden parties, receptions and official entertainment during state visits. Its origins lie in a deal done by George III on his accession to the throne in 1760. The King agreed to surrender the considerable revenues from the Crown Estates – vast royal landholdings dating back to 1066 that still today include Regent Street and large parts of St James’s in central London, as well as forest, farmland and half the foreshore – and to receive in return a flat fee of £800,000 a year for the duration of his reign. (Any money that the Estates earned beyond that was to go to parliament.) Unlike today, the Civil List was not purely for the King’s own expenditure: he also had to use it to fund the civil, but not military activities of the state – hence the name.12
The arrangement became increasingly unworkable during the late eighteenth and early nineteenth centuries, as Britain turned into a world power and the size of the state and scope of its activities grew. Rather than simply increase the Civil List – and with it the economic clout of the monarchy – parliament began to fund an increasing share of expenditure directly itself. In 1830, when William IV acceded to the throne, this process reached a logical conclusion: a new reduced Civil List was introduced, allotted purely for the benefit of “the dignity and state of the Crown and the personal comfort of Their Majesties”.13 The government’s civil expenditure, like the money it spent on the military, would henceforth be financed by parliament.
Over the years since, British monarchs have done well out of the Civil List – while all the while pleading poverty. Queen Victoria’s German-born husband, Prince Albert, who always felt himself especially badly done by, led the way in the early 1850s, calling for a more than doubling of his £30,000 annuity to £80,000 to pay for “the ordinary establishments and pursuits of an English gentleman”. These he listed as “a hunting establishment, a pack of hounds, a breeding stud, shooting establishment, a moor or forest in the Highlands of Scotland, a farm, etc. etc. etc.”.14
Yet at the same time Albert and Victoria had managed to buy Osborne House, a substantial property on the Isle of Wight, in 1845. The initial cost was £45,000, but the total bill, once they had rebuilt the place in Italian Renaissance style, came to £200,000.15 Then, in 1852, the royal couple found the £31,500 necessary to buy the freehold on Balmoral. After Albert’s death in 1861, Sandringham was purchased for their son, the future Edward VII, in the
vain hope it would encourage him to spend more time away from his unsuitable London friends.
And so it went on: when Edward came to the throne in 1901 he was deeply in debt after years of lavish living; when he died nine years later, he left £2 million – the equivalent of about £150 million today – in his will, thanks to all the money he had managed to set aside over the years out of the Civil List. His son, George V, saved a net £487,000 during his quarter of a century on the throne.16 This did not prevent Sir Frederick Ponsonby, the keeper of the King’s privy purse, in 1920, at a time when the post-war boom was turning to bust, from asking for an increase of at least £103,000 in the Civil List from the £470,000 at which it had been fixed a decade earlier. In trying to make the case for royal penury, Ponsonby conjured up the rather fanciful image of “the King going to open parliament in a taxicab”. The request was declined. The Treasury instead initiated a study of the expenditure of the royal household, recommending a series of economies that saved £40,000 a year.
Such a build-up of wealth has been facilitated by the extraordinarily favourable tax status enjoyed not just by British monarchs but also by the extended royal family over the years. When income tax was introduced for the first time in peacetime in 1842, Sir Robert Peel, the prime minister, made great play of Queen Victoria “volunteering” to pay it on her income, including on the bulk of her £385,000 Civil List. Yet from 1910 onwards, even as the general income-tax burden on the rest of the population grew, so the royals were progressively freed of tax.
That changed as a result of 1992, the present Queen’s “annus horribilis”, which saw the marriages of three of her four children fail very publicly, followed by controversy over who – the royal family or the government – should fund the £37 million bill for repairing the damage to Windsor Castle caused by a massive fire. With the royal family’s popularity plunging, John Major, the prime minister, announced in February 1993 that the Queen had “voluntarily” decided to pay income, capital-gains and inheritance taxes on her personal income and wealth, starting from the start of the next tax year that April.
Yet the Queen was not quite subjecting herself or her family to the same rules as her subjects. For a start, the Civil List would not be taxed, as it had been under Victoria, on the grounds that it was used to cover official expenses. Furthermore, “special arrangements” would be made to exempt the royal palaces and certain other assets from inheritance tax when they pass directly to her successor – presumably Prince Charles.
Quite how much tax the Queen would have to pay depended on how wealthy she was, which palace officials were understandably reluctant to reveal. At a press conference, Lord Airlie, the Lord Chamberlain and head of the Queen’s household, nevertheless tried to downplay the extent of her wealth, saying that the monarch had authorized him to describe estimates of £100 million as “grossly overstated”. Some experts estimated the value of the Queen’s private investments at roughly £75 million, which, provided that she was earning a reasonable rate of return on her money, would have equated to between £1.5 and £3 million a year in tax.
As part of the package of reforms it was also agreed that henceforth only the Queen, Prince Philip and the Queen Mother would benefit from the Civil List. This left the question of the more than £1 million a year in allowances paid not only to the Queen’s three younger children, Anne, Andrew and Edward, but also – in a unique feature of British royal financing – to her cousins, the Duke and Duchess of Gloucester, the Duke and Duchess of Kent and Princess Alexandra. It was decided they would continue to be paid, but the Queen would then give an equivalent sum back to the Treasury out of income she earned from the Duchy of Lancaster, a portfolio of 46,209 acres of farmland, urban developments and historic buildings across England and Wales.17
It was in this climate that Elizabeth suffered what was one of the most symbolic blows to her prestige – the loss of the Royal Yacht. In a reflection of its seafaring past, Britain has a long tradition of such vessels. Britannia, built in Clydebank in Scotland and launched in April 1953 by the young Queen, was the eighty-third such yacht since the Restoration of King Charles II in 1660. By the late 1990s, however, the yacht was badly in need of replacement: while Major’s Conservatives vowed, after some hesitation, to replace it, Tony Blair’s Labour Party was opposed, claiming that the £60 million it would cost could be better spent elsewhere. When Blair won the May 1997 general election, Britannia’s fate was sealed. The yacht was decommissioned that December and moored in Leith, Edinburgh, where it was turned into a tourist attraction and luxurious venue for corporate events. The move, the former prime minister was later to lament, was “such a mistake”.
In the years that followed there were proposals for the construction of a new royal yacht, financed perhaps through a loan or the Queen’s own money, but they made no headway. Then, in January 2012, in the run-up to her Diamond Jubilee, Michael Gove, the monarchist education secretary, suggested a replacement as an “excellent” way of thanking the Queen “for her long and untiring service to this country” – although how to raise the money to build it was not clear. Cameron described the proposal as a “truly inspirational initiative” but made clear that the government would not finance it at a time when public spending was being cut.18 This left open the possibility of public donation – anathema to many, especially on the left – or that it should be paid for by big business. But then there was the question of how to fund its upkeep and running costs.
Although deprived of her yacht, the Queen still has use of aircraft from No. 32 (The Royal) Squadron, based at RAF Northolt, north-west of London, and of a Sikorsky S-76 C+ helicopter operated by the royal household from Blackbushe Airfield in Hampshire. And there is the Royal Train, a pair of two special diesel locomotives that can pull up to eight royal carriages, including sleeping, dining and support cars, all painted in a distinctive maroon with red-and-black coach lining and a grey roof.
Traditionally the Civil List was revised every ten years – which would have meant an increase in 2000. Unusually, it was left unchanged by Blair. The previous settlement of £7.9 million a year, set a decade earlier, had turned out to have been too generous, as inflation had been below the predicted 7.5 per cent a year, leaving the palace with a massive surplus of £35 million by the beginning of the new millennium, which was only gradually eaten away over the following years as expenditure rose.
As 2010 approached, palace officials began again lobbying behind the scenes for an increase in the Civil List, on the grounds that the £7.9 million, adjusted for inflation, was worth only a quarter of what it had been twenty years earlier. On the other hand, the Civil List Reserve, although much depleted, still amounted to more than £20 million. Aides, meanwhile, were calling for an increase in the grant-in-aid that covers the maintenance of Buckingham Palace and the other royal residences. These buildings, it was claimed, were in a poor state, as demonstrated by an incident in 2007 when Princess Anne narrowly avoided being hit by a piece of loose masonry that fell off the roof. The palace’s staterooms, where the Queen entertains foreign leaders, hadn’t been redecorated since 1952 and were also said to be in urgent need of repair. A palace audit in 2009 put the cost of meeting the backlog of repairs at £40 million.
The economic climate was not a good one for the Queen or anyone else to demand a pay rise, however. After becoming prime minister in 2010, David Cameron was committed to cutting the deficit, and so when his government unveiled its budget the following month, it was announced that the Queen, like many of her subjects, would have to accept a pay freeze – and continue to dip into the Reserve, which contained enough money to keep her going through 2012, the Diamond Jubilee year.
In the meantime, George Osborne, the chancellor of the Exchequer, was working on a more radical solution. From April 2013, it was announced, the Civil List would be combined with the various other payments made to the monarch covering the cost of building and travel into a single payment, to be known as the Sovereign Grant. This w
ould be set at the equivalent of fifteen per cent of the profits of the Crown Estate, which reached £210.7 million in 2010 – thereby restoring the link between the monarch’s income and the revenue from her traditional lands that was broken more than two hundred and fifty years ago.
If such a formula had been in place in 2010, the Queen would have received £31.6 million, slightly more than the £30 million she was actually paid. Critics also pointed out that Crown Estate’s profits were expected to grow substantially thanks to a planned expansion of wind farms on its coastal land. Faced with an outcry over this potential windfall for the monarchy at a time when everyone else was being forced to live more frugally, the government swiftly announced that a cap would be imposed on the formula.
In the event, the net effect in the short term was expected to be a slight decline – rather than rise – in royal income; an official Treasury briefing document deposited in the House of Commons Library for the second reading of the Sovereign Grant Bill warned that the levels of support provided under the new system would, in real terms, in the early years be “below what the royal household spent in every one of the last twenty years”, indicating that the Queen could not expect a rise in her real pay until April 2015 at the earliest.19
Under the new formula, it is also expected that for the first time Elizabeth will be forced to lay her account books before parliament to promote “clear accountability” and “strengthen public confidence”. Whether such scrutiny will lead, in turn, to a reduction in the main item of expenditure, namely the vast number of staff employed to look after the Queen and her family, remains to be seen.
Prince Charles, as the heir to the throne, does not receive an allowance from the Civil List as such, but like previous princes of Wales before him he is funded by income from the Duchy of Cornwall, a predominantly agricultural estate of 134,724 acres that has been passed down the generations since it was created in 1337 by Edward III for his son and heir, Prince Edward, the Black Prince. Part of the income finances Charles’s public and charitable work, while the remainder goes on meeting his costs and those of his wife Camilla and Princes William and Harry. Bills run up by the Prince while carrying out his official duties are also reimbursed out of the grants-in-aid.
The Great Survivors Page 10