In the view of the royal family this could also undermine their political independence since in order to be constitutionally impartial, the monarch needed to be financially independent. At one stage, Prince Charles even floated the idea of doing away with the Civil List altogether in return for allowing the royals to keep all the revenue from the Crown estates - by his rough calculation, the sums of money were almost the same. In this way the monarchy would be self-financing and autonomous.
This was never acceptable to MPs who jealously guarded their control over the royal purse strings. When the agreement was laid before parliament it included a clause to ensure that any sovereign did not abuse the arrangement as a tax shelter (“the provisions included in this memorandum will not be used to reduce tax payments by themselves [the Queen and the Prince of Wales] or other members of the Royal Family in circumstances which the provisions were not supposed to cover”).9
Although not referred to by name, the agreement was clearly designed to protect the private residences of Balmoral and Sandringham, but some MPs were worried that it might be used as a blanket tax exemption for all private property. In the parliamentary debate in February 1993 John Smith, the leader of the Labour opposition, asked pertinently: "Will the prime minister explain why all private assets passing from one sovereign to the next should also be exempt? Although private assets such as Sandringham and Balmoral could well be regarded as having at least partial official use, which could be recognized, why is it necessary to exempt all other private wealth?" John Major did not comment directly on the two private residences but argued that "the Rt Hon. and Learned gentleman will accept there is a unique circumstance in a hereditary monarchy, and it is right therefore that there should be specific exemptions for assets passing from one sovereign to his or her successor."
It should be noted in passing that although he could not be certain what would be in the Queen's last will and testament Prince Charles clearly regarded himself as the future steward of Balmoral and Sandringham having told his biographer Jonathan Dimbleby that he wanted to look after Balmoral so that it could be passed on to future generations in the best state possible.10 By all accounts, he felt a similar sense of responsibility for Sandringham but of the two he held a special affection for what he often described as "the best place in the world – Balmoral." Elsewhere he recorded his support for Sandringham and parts of Balmoral being open to the public - which some cynical voices might interpret, having seen what has happened to the opening up of Highgrove House to general visitors, as a way of enhancing their status as part of the royal heritage and downplaying their role as a purely private residence.
The new arrangement was set out in the palace's official guide to its revenues "Royal Finances." It justified the inheritance tax privileges on the grounds that “a sovereign who does not retire is unable to mitigate inheritance tax by passing on assets at an early stage to his or her successor." Curiously, the term sovereign was widened to embrace not just the reigning monarch but also his or her consort. As such, the Queen Mother as queen consort of George VI was included. It should be said that not everyone was happy with this addition to the exemption rule. When in 2003 a Fabian commission into the future of the monarchy looked into the matter, it recommended that “special exemptions, such as those made for the Queen Mother, are not appropriate and should not be made in the future."11
What worried the Fabians is that while it might be legitimate to exempt public assets - such as the crown properties and the royal collections - from inheritance tax, private property might also slip through the net. It has been estimated that the queen consort exemption may have cost the Exchequer £20m-£30 million in lost tax on the Queen Mother's estate.
At the time of her death, estimates of the Queen Mother's financial worth varied between £50 million and £70 million. The Royal Rich Report which came up with a figure of £53.4 million calculated that her art collection alone was worth £36 million.12 From her early days as a child visiting the Uffizi gallery with her Florence-based grandmother, the Queen Mother had harboured a deep passion for paintings. Encouraged to explore contemporary art by Sir Kenneth Clark, the surveyor of the king’s pictures between 1934 and 1945 and later a director of the National Gallery, she built up a valuable collection of the works of modern British artists. She bought an Augustus John portrait of Bernard Shaw for £750 and Wilson Steer's Chepstow Castle for just over £1,000. Many of these purchases were handled by her other artistic mentor, Sir Jasper Ridley, a trustee of the National Gallery and a chairman of the Tate Gallery as well as Coutts Bank. He helped to arrange the acquisition of her most impressive work - Landscape of the Vernal Equinox by Paul Nash. It was not to the taste of her twelve-year-old daughter Margaret who reportedly thought that her mother was mad to buy it.13 We do not know how much the Queen Mother paid for the visionary painting of a Thames Valley landscape but today Nash's pre-war work regularly commands hundreds of thousands of pounds and one abstract piece from 1936 recently fetched £937,250 at auction.
The Nash landscape was bought in 1942 and World War Two proved a beneficial period for picking up valuable paintings at knock down prices. In 1939 she bought Alfred Sisley's La Seine sur St Cloud and William Sickert's Ennui and in November 1940 two works by Duncan Grant - Newhaven Pier and St Paul's. Around 1940-41 when London (and the royal palaces) were under constant bombardment she commissioned a series of water colours of Windsor Castle from the renowned landscape artist John Piper who later became an official war artist and designed the stained windows for the war-damaged Coventry Cathedral. Again she was guided by Kenneth Clark who told Piper he would be paid £150 (including expenses) for fifteen paintings - in retrospect, a bargain for the palace. The Queen Mother later displayed them prominently in Clarence House and today they are recognised not just as a faithful invocation of London under the Blitz but as a work of considerable artistic significance. At the end of the war in 1945 the Queen Mother picked up her greatest bargain - paying Gallerie Wildenstein £2,000 for Claude Monet's Study of Rocks: Creuse, Fresseline.
Clarence House soon became her own private gallery. On one side of the hallway was a fine sketch by Simon Elwes of the Queen Mother that was the basis for a major magisterial portrait of her for Windsor Castle. Also in the hallway was a group portrait by James Gunn entitled “Field Marshall Montgomery in his mess tent in Belgium in 1944” which she snapped up in 1945 at a Royal Academy exhibition before Monty could buy it himself (when she later refused to let him have it Gunn had to paint another version). Over the fireplace in an adjoining room hung an unfinished portrait begun in 1939 by Augustus John. In the end she apparently got it for free as in 1961 it was presented to her as a gift. Edward Seago also gave her many paintings for her birthday and at Christmas, and her portrait by John Singer Sargent was a wedding gift. The house contains other important paintings by Singer Sargent as well as works by Graham Sutherland and Philip de Laszlo. Interestingly for two such dissimilar royals her penchant for Laszlo, Seago and Nash would closely mirror Prince Philip’s choice of favourite painters.
Although it is notoriously difficult to track down the exact provenance of all of the Queen Mother's gems, we do know for sure the source of one of the most valuable additions to her jewellery collection. Ironically this is due to a publicly available will and the generosity of a society hostess who did not allow her own mortality to get in the way of social climbing. When Dame Margaret Greville died in September 1942 she left behind an estate worth £1,505,120 and a will running to fourteen pages. In the schedule devoted to bequests, she left £20,000 in cash to Princess Margaret, £12,500 to Queen Eugenie of Spain, £10,000 to Sir Osbert Sitwell, £10,000 to the national anti-vivisection society and £500 to her god-daughter Rosalind Cobitt. In the schedule devoted to her jewels, once again she gave preferential treatment to royalty: to Queen Elizabeth she gave all her jewels but to her friend Marie Adeline Liron just small items of jewellery and personal possessions valued at less than £100.
Her gem box
contained one of the finest private collections of jewellery in London. The most valuable items included Marie Antoinette's diamond necklace and Catherine the Great's diamond ring as well as an openwork diamond tiara designed by Lucien Hirst and various emeralds and diamonds owned by Empress Josephine. Not a bad haul for an illegitimate daughter of a housekeeper and a self-made brewer. When her father, William McEwan, died she inherited the famous brewing business and used the wealth - as her obiturist put it - "for the purpose of a wide but discriminating hospitality." Being childless she had no one to leave her money to and so she gave it to her surrogate children - the Duke and Duchess of York. When the future duchess began making arrangements for her wedding in April 1923, Mrs. Greville even offered to buy the linen for the new household as a wedding present. But as the price tag was in the region of £1,500, the over-generous offer had to be declined.
She cultivated the Windsors with the passion of a royal horticulturist. As an alternative wedding gift, she invited the couple to spend their honeymoon at her country mansion near Dorking, Polseden Lacey. At one stage, she wanted to bequeath them the whole house but as soon as it became clear that Bertie would be king and have no shortage of country houses, she had to restrict herself to just offering them hospitality. As the visitors' book ostentatiously shows, they became frequent dinner guests in the years before the abdication. Life was never dull with Maggie Greville and her smart set. The Queen Mother later wrote to Osbert Sitwell saying how she found Mrs Greville such good fun and quite a character.14 She was, however, a Nazi sympathiser and in the early thirties was "delighted" to meet with Chancellor Hitler in Nuremburg. The diarist MP Harold Nicolson recognised her at the time as a pernicious influence on society, describing her as a “virulent little bitch.”15
But the inheritance brought some embarrassment to the queen consort. When after weeks of society gossip about the estate Mrs Greville's solicitor came to the palace to hand over some of the jewellery, she asked him what was the point of pretending she knew nothing about the will, when everyone told her that the property was left to the National Trust.16 To clear up the matter, the executors were forced to issue a public statement immediately. In private, however, she was as pleased as punch with the bequest, acknowledging to Queen Mary that like most women she had a soft spot for beautiful stones.17 In the event, the jewellery was kept locked away in the jewel box during much of the war and the Bucheron tiara only appeared in 1947 during a state visit to South Africa.
The king, according to her official biographer, may have had reservations about the bequest. It was widely believed at the time that the reason why Mrs Greville had given her jewels to royalty was to ensure that they would be displayed in the most public arena. In other words, they would become part of the royal collection. Even today the precise ownership of the jewels is in doubt. The constitutional historian Michael Nash summed up the dilemma: "there has been speculation as to which of her jewels belonged to the state as official gifts and which were personal property."18 Of course, if the will were open to public inspection, the provenance of the jewels would be much clearer.19
In truth the Queen Mother - unlike Queen Mary - was never a great hoarder of jewels. She tended to wear the same favourite pieces of jewellery: a brooch inherited from Queen Victoria, a necklace inherited from Queen Alexandra and a diamond brooch passed on by husband at their wedding. This is just some of the jewels she received from the royal family. She must have been left many jewels from her own family - bearing in mind that her mother and her father the Earl of Strathmore were both dead before her forty-fifth birthday and she outlived her six brothers and three sisters (not to mention fifteen of her twenty-two nieces and nephews). We know for certain that her father gave her as a wedding present a diamond tiara which has been valued at around £400,000.
Her horses are easier to track. She grew up in a world of equestrianism finding delight in hanging around the stables of the family’s country home in Hertfordshire. Her love of the turf - and particularly steeple chasing which drew a wider social spectrum than the more upper crust flat racing - became a driving passion of her life after the death of George VI. In an echo of her profligate grandfather-in-law, Edward VII, she began to acquire bloodstock. Her first big buy was Double Star in 1956 which at £4,000 was a major outlay even for a dowager queen consort. She went on to purchase a string of sixteen jumpers under the trainership of her friend Peter Cazalet and was famous for never selling a horse, however lame or old. Eventually costs caught up with her. After one disastrous year, the Queen had to step in to pay Cazalet’s bill on behalf of her mother who scribbled under the total her apologies for the high figure.20 She also spent much on gambling both on course and at Clarence House where she could listen to the commentaries and latest odds thanks to the “Blower” - her own loudspeaker system similar to that used at a betting shop. The settlement of bets was handled by others, most notably her personal treasurer.21 At the time of her death - according to her biographer, Hugo Vickers - she had eleven horses in training, most with Nicky Henderson at his Lambourn stables.22 Even though some of these were homebred or bought as inexpensive one- or two-year-olds, they each would have been of value - perhaps up to £100,000.
The Queen Mother’s other great passion was entertaining and to that end she possessed a valuable wine cellar, the worth of which was once estimated at over £100,000. Unfortunately there is no known inventory of her stock of fine wines and spirits - although reportedly it included a rare vintage of Veuve Cliquot champagne called Rich England. All we have to go by is the record of dinner guests at Clarence House and her other residences who complimented her on both the quality and quantity of the alcohol on offer. The interior designer Nicky Haslam in his memoirs recalls a working visit to the castle of Mey where on arrival at midday her valet William Tallon offered him a choice from the drinks tray - "the bottles, many less than half full, contained every single aperitif known to man. Dubonnet naturally [her favourite tipple] but also red and white Martini, Punt e Mes, Fernet-Branca, Amer Pico, Cinzano, Crodo, Campari, Ricard…with much Alsatian wine.”23
The expenditure on her public duties - although some critics have suggested that it leaked into her private life too - was met by a generous annuity from the Treasury. Over the decades her Civil List payments were the source of much friction between government, parliament and the palace. When George VI died in 1952, the Queen Mother was granted the same annuity that the Dowager Queen Mary received in 1936 - £70,000. This remained unchanged until the 1971 Select Committee inquiry into the Civil List which raised the payment to £95,000. In defence of this increase for a seventy-year-old who was performing fewer official engagements, the Lord Chamberlain, Lord Cobbold, stated that in his personal view any pay rise should be considered "as something of the nature of the payment for services rendered over years of peace and war."
The uplift seemed very generous, but we now know that the Queen Mother (via representations by her own mother) in fact wanted more. The released cabinet papers from the National Archives disclose how the Heath government had to veto the palace's proposal for a 100% pay rise to £140,000 saying that "it might well lead to embarrassing criticism of the royal family." Senior ministers suggested that the amount must be kept under £100,000 and recommended £90,000 instead.24
The Queen Mother's response to scrutiny of her Civil List expenditure was that the public expected her to maintain a lifestyle appropriate to the mother of the sovereign and this inevitably involved special transport and other privileges.25 In the long run she got her way: her annuity was raised to £493,000 in 1991 and by the time of her death it was £643,000.
This amount was insufficient, however, to pay for her lavish lifestyle maintained by a staff of over fifty. When she died, she is believed to have left debts of £5m-£7m. Thanks to a leak from a bank employee, we know that in 1996 her overdraft with Coutts stood at £4m. Her official biographer does not dispute this figure, conceding that there was a widely held perception that she was extravag
ant and lived beyond her means.26 He also discloses how every three months someone would deliver in person from Coutts her passbook which in longhand gave details of all her personal cheques.
Over the decades, treasurer after treasurer in the royal household grappled manfully with her chaotic finances. In the fifties, Arthur Penn tried to remind her of the need for prudence through a series of polite letters, although as a friend as well as a courtier it was hard for him to put his foot down - or even resign as he wanted to as he reached seventy. In 1961 the poisoned chalice passed to Sir Ralph Anstruther, an old Etonian “martinet” who had served in the Coldstream Guards and been awarded the Military Cross in 1943. It was his responsibility to sign a lot of the Queen Mother's cheques and oversee her expenditure. Since she never carried cash, he had to discreetly arrange payment for purchases when she was out of earshot. Although he had an almost unsurpassed knowledge of royal protocol and an impressive network of international contacts that smoothed the way for the Queen Mother's many foreign trips, he knew very little about finance. Eventually the pressure of dealing with a spendthrift dowager queen and the onset of age took its toll: he would according to legend turn up for work on a Sunday unaware that it was not a weekday and he would be found wandering round Clarence House not wearing any trousers. In 1999 he was replaced by someone with a real financial background, Sir Nicholas Assheton who had just retired as deputy chairman of Coutts (or as an annoyed Anstruther called him "a little clerk from Coutts").
Even his financial skills and inside knowledge of the ways of the bank did not stem the overdraft. The Queen who probably subsidised her racing costs is thought to have funded the shortfall (reportedly contributing as much as £2 million a year) and it is believed that Prince Charles may have also made an annual contribution of £80,000.
Royal Legacy: How the royal family have made, spent and passed on their wealth Page 23