OUR MUCH REGRETTED MONARCHY, Part 2: The Royal Welfare Benefits System

This past week we have seen played out that regular Parliamentary farce, known as the Queen’s or King’s Speech, in which a ridiculous cast includes a set of Beefeaters still looking for Guy Fawkes, Black Rod and Gold Stick, and a wooden-faced monarch who has not even written the lines. This time, Charles took on the expression of a man compelled by convention to say things he didn’t mean or agree with. But he will have to learn that this is the only role as a constitutional monarch that he can have.

In Part 1 of this blog post on the British monarchy, I briefly traced the tortuous path which led us to the current House of Windsor, the dysfunctional and fractious nature of the current royal family, and the various scandals surrounding its relationships, both fed on and promoted by a scurrilous tabloid press. I now move on, as promised, to obey the injunction, that if we want to understand issues of public interest and concern, to ‘follow the money’. Key questions about royal riches call for answers, or at least some sort of penetration of the walls of silence and secrecy which have been constructed quite deliberately to obfuscate such questions. In seeking answers, I follow George Orwell, who said that he wrote ‘because there is some lie I want to expose, some fact to which I wish to draw attention’.

Key Question: How wealthy is the royal family?

This is a question the royal family have always been very anxious to avoid, for the obvious reason that being extremely wealthy, as they so manifestly are, in a country where large numbers of their subjects are often classified as extremely poor, is not a good look. The present monarch is likely to have inherited considerable assets from both of his parents, and also by virtue of his succession to the throne. These include large scale landed properties in England, Scotland and Wales, even in Northern Ireland, which have been handed down over the centuries. But the details of more than 30 of the Windsor inheritances are speculative, because they have been deliberately kept out of the public domain. This can lead to all kinds of unresolved matters. A good example is provided by Queen Elizabeth’s husband, the former Duke of Edinburgh. It’s thought that he was very well-heeled, but we don’t know exactly how well-heeled, or what exactly his range of possessions was; nor do we know what he left to his successors. The same will apply, unless I am mistaken, to the provisions of Elizabeth II’s will, though at least we have estimates of her net worth, reported by the Sunday Times Rich List in 2022 to be around £370 millions: not a lot, you might think, compared to the fortunes of the big capitalist beasts around the world, whose assets are counted in tens of billions, but very near the top of the ever-growing British upper-class money tree. Estimates of King Charles’ private wealth vary between £600m (Sunday Times Rich List, 2023) and £1.8bn (Guardian, September 2022).

However, a distinction is needed between the fundamental capital values of royal assets, their probable enhanced future value, and both the present and future cash values which they may generate. We also need to bear in mind the distinction between assets which in some sense are public, and open to inspection, and those which are private, and mostly kept from public view. A question seems to arise recently as to how to distinguish between public and private assets where gifts and other acquisitions are involved.

Public Profits

The main source of ready money for the monarchy is known as the Crown Estate. Feudal in origin, and dating from the Norman conquest in 1066, this comprises assets: land, property (palaces, buildings, including all of Regent Street and Ascot Racecourse) and crucially now, rights in all the UK’s offshore seabed. Any revenues from this Estate are independently managed and accrue in effect to the Treasury, in exchange for an annual ‘sovereign grant’. This is assessed as an agreed percentage of Estate profits, in order to meet the costs of the royal family’s official duties, travel, and the maintenance of royal palaces (e.g., Buckingham Palace). This grant is now negotiated by a select inside team of only three people, being the Prime Minister, The Chancellor of the Exchequer, and the royal household’s financial manager (who is he/she? You might well ask.)

This might seem in principle to be a reasonable arrangement, but it has prompted controversy. The portfolio of Crown Estate land and buildings was valued at more than £20 billions in 2022. Offshore wind projects brought in profits that increased the total Crown Estate profits in 2021-22 to £442.6m, an increase on the previous year of nearly £130m. But this year the government announced a new agreement, in which the monarchy’s share of profits would fall from 25% to 12%, presenting this as a public-spirited pay cut. However, substantial Crown profits from offshore development leases are forecast to rise from £442.6m this year to £1.4b in 2023-24. Commentators have been quick to point out that this potentially amounts not to a pay cut for the monarchy, but a substantial increase, from £86.3m this year to £124.8m in 2023-24, a hefty pay rise of 45%. The former Cabinet Secretary Lord Turnbull has accused the Treasury of ‘a deliberate attempt to obfuscate’. This scarcely accords with King Charles’ declared intention to slim down the monarchy. Again, it is not a good look at a point when it is reported by an impeccable research source (Joseph Rowntree Foundation, October 2023) that 3.8 million of the King’s subjects are now living officially in destitution, a figure that includes a million children (it’s doubtful if they will have enjoyed lavish Coronation street parties). Further millions of his subjects are enduring a painful cost of living crisis, and food banks are overwhelmed. Moreover, the royal family will enjoy their 45% bonus from a government that has been arguing militantly against pay increases for every other part of the public sector. 

In addition, the taxpayer underwrites many other costs: security (not known, best guesses being between £15m and £100m); policing, not made public; the costs of official events like funerals and coronations (Queen Elizabeth’s funeral £162m, King Charles’ coronation, estimated between £50m and £100m). Finally, the likely greatest loss to the taxpayer comes from the royal family’s exemption from inheritance tax, another unknown.

Private Perks

Estimates of the private wealth of the royal family vary widely, largely because of the secrecy surrounding this whole question. As indicated above, King Charles’ private wealth has been variously estimated to be between £600m and £1.8bn. The Duchy of Lancaster, a huge property portfolio, held in trust to provide the monarch with a private income, generated profits of £24m last year. The Duchy of Cornwall similarly provides a private income to the Prince of Wales, a benefit which previously was enjoyed for very many years by Charles, and is now transferred to the new Prince of Wales, his son William. In the year 2022 this particular ‘benefit’ amounted to just under £10m (£21m profits, but Charles voluntarily paid 45% income tax).

There are 22 royal residences, mostly part of the Crown Estate, and the running costs and maintenance of these are met out of the sovereign grant: for example, the new 2023 grant arrangement incorporates the substantial costs of the refurbishment of Buckingham Palace. We know relatively little about the domestic arrangements of the extended royal family, many of whom live in various bits of the various properties which make up the Estate. Charles as King is now their effective ‘landlord’ and is already at odds with brother Andrew who lives in Royal Lodge, Windsor with, rather oddly, his ex-wife Sarah Ferguson: rumour has it that he has been asked to leave. Harry and Megan have simply removed themselves, it seems permanently, to the United States. More evidence of the ‘model family’ coming apart. Linked to these highest ranking members is a whole network of family relations, ranging from Dukes to a variety of royal cousins. All are on the royal payroll to a greater or lesser degree, enjoying lucrative positions and benefits merely by accidents of birth.

Who Governs?

Balmoral and Sandringham are private palaces. An issue that arises here relates not so much to royal financial privileges, rather to the appropriate constitutional position of the Crown in relation to parliamentary legislation. Let’s recall that the long established rule in our elective democracy is that the monarch must not and should not interfere with the decisions of Parliament and is obliged to give formal assent to the laws and ordinances agreed by Parliament. At this moment in time the royal assent is a formal ritual. This was the essence of the ‘glorious revolution’ which as long as three and a half centuries ago swept aside monarchical rule in favour of the rule of law through Parliament. This took a couple of centuries to take shape and settle down, as both the Hanoverian kings and Queen Victoria at times attempted to influence what was going on in their ministerial cabinets and Parliament. But with the late nineteenth century and early twentieth century  development of universal suffrage and more tightly organised national political parties, kings and queens were pushed into a formalistic position where they could not intervene in essentially democratic political processes.                                                                                                           

Most contemporary politics textbooks outline this straightforward understanding. But just recently we have discovered from a Guardian investigation (29 June 2022) that our constitutional monarch, Queen Elizabeth II, along with her son Prince Charles, through a process known as ‘Queen’s consent’ had long been allowed to intervene in and amend more than 1,000 pieces of proposed legislation. For example, by this means they were allowed to amend regulatory provisions framed to apply to all landed properties in ways which meant they would not apply to the royal properties. Documents show that Charles has lobbied ministers on leasehold reform legislation, at least once applying pressure to ministers to ensure an exemption to prevent his tenants from having the right to buy their own homes. This ‘consent process’ has also been used often in Scotland and has now brought significant criticism. The worst aspect of this is the secretive way in which these interventions have been conducted, not to mention the inequity involved in ‘one law for them, another law for us’. The disingenuous defence made is that the changes requested are made before the legislation is introduced into the respective legislatures.   

A rather problematic aspect of ‘the powers of the monarchy’ is that around the time of Elizabeth’s coronation in 1953 large numbers of people thought the Queen was chosen by God, and that she could refuse to accept Parliament’s legislation. Until recently many also thought that she could decide who would be Prime Minister, and while this is a rather fuzzy area, whenever it has come up in recent times the political and bureaucratic system has managed to ensure that it is able to tell the monarch who to invite, rather than allow the monarch to choose. There has been inconclusive speculation about how such a decision may be reached in the event of a ‘hung Parliament’ but it’s clear in principle that a Prime Minister must be the person who commands the confidence of his/her own party, and who can further command the confidence of the House of Commons. Any attempt by a monarch to depart from these conventions would trigger a major constitutional crisis.

There is some concern about how Charles as King might approach any of these matters. When Prince of Wales, he had a track record in trying to interfere inappropriately in public policies and decisions, famously being given to writing long letters in spidery handwriting to ministers and officials: no one would have been surprised if they had been in green ink, but it was in fact black. His love-hate relationship with writing materials has been caught on film recently. More seriously, I note that he has already made direct statements on what might be controversial areas of public policy: he was quick to issue a statement on the Israel/Gaza dispute, and has taken a leading part in discussions about environmental problems. But neither of these policy areas is uncontroversial, and interventions on one or the other side could give offence to some of his subjects, or run counter to the views of some political representatives of his subjects. While we might see his policy opinions as potentially beneficial in themselves, they should not be too strongly paraded by a monarch who must be, and be seen to be, a constitutional figurehead, not a player in the fractious and competitive game of politics. This may not be a position Charles will find comfortable, but Alan Bennett described it perfectly when he imagined Queen Elizabeth reflecting on this very discomfort:

‘One is often said to have a fund of common sense, but that is another way of saying that one doesn’t have much else, and accordingly perhaps I have at the insistence of my various governments been forced to participate, if only passively, in decisions I consider ill-advised and often shameful. Sometimes one has felt like a scented candle, sent in to perfume or aerate a policy, monarchy these days just a government-issue deodorant’

Quoted in Alan Bennett’s Diary, London Review of Books January 2023, being an extract from his own book The Uncommon Reader (2008)

I rather fear that Charles III will not for long consent to be a government issued deodorant… and 17^th century poet the Earl of Rochester’s little couplet about Charles II may well have resonance for Charles III:    

We have a pritty witty king

And whose word no man relies on

He never said a foolish thing

And never did a wise one

Acceptable gifts…?

There is one area where the boundary between public and private possessions is rather muddied, that is the treatment of gifts received by members of the royal family in the course of their public duties. The long reign of Elizabeth and husband Philip, Duke of Edinburgh, involved innumerable state visits overseas, most particularly to member countries of the Commonwealth, and to colonies that had not yet acquired that independent status. In return, Britain played host to State visits from the leaders of many other countries across all the continents, Europe, Asia, the Americas, the Middle East.

Unsurprisingly, gifts were given and received on most of these occasions, to add to the similar exchanges between other monarchs and national leaders over the past two centuries, or even earlier. This means that now the royal family has built up significant and extremely valuable collections. But do these belong to the state, or are they now private collections? Tricky, again because so often a veil of secrecy has been drawn over such questions.

Horses

Queen Elizabeth developed as a young girl a love of horses, first as a rider, later as a racegoer and owner of racehorses. Of course, thousands of young girls fall in love with horses, but few ever own dozens of them, or see their horses win prestigious races like the Derby. One reason is that few are wealthy enough. Nor do they mix effortlessly with extremely rich horse owners, some of them with extremely dubious reputations, like the autocratic Ruler of Dubai.  Inevitably, with friends like these, Elizabeth often received gifts of highly bred horses, amounting at her death to whole stablefuls of significant capital assets, reported as valued at £27m. So who do these stablefuls of money belong to, the King (now) or the state? Charles seems to know, because one of his earliest acts has been to sell off a stableful or two at a profit of £2.3m. Will this money be regarded as a part of the Crown Estate, so at least giving some return to we (mostly) non-horsey subjects? Or will it go into Charles’ capacious private pockets? I think we should be told…

Art

The Royal Collection is extensive (1m works of art) and extremely valuable (estimated at £10bn). A collection built up over centuries, it contains both ‘old masters’ and paintings by famous contemporary artists. Some of the latter were gifts from the artists themselves. Do these works of art belong to the state (as part of the Crown Estate) or are they owned privately by members of the royal family? The waters have been muddied here recently since the Duke of Edinburgh built up his own private collection which is thought to include gifts from contemporary artists and/or an unknown number ‘borrowed’ from the Royal Collection. Who has inherited these valuable assets? Is it open to Charles to sell them, as with the horses? We cannot know the answer until a) the Duke’s will is made public, which might well under current legal practice, never happen or b) a sale is openly made and accounted for in the formal royal finances.

Jewels

The Crown Jewels are possibly priceless and not open to sale; but much of the very extensive Royal Collection of jewellery is privately owned by the royals. Much of the Collection was personally created by Queen Mary (wife of George V, and Elizabeth’s grandmother), described as ‘mesmerised by jewellery’, and notorious for commandeering valuable objects from her hapless aristocratic subjects during one of her many royal progresses across the country. A valuation of the jewellery collection commissioned by the Guardian and reported in April 2023 came up with what was regarded as a conservative estimate of £533 m.

Investments

The same Guardian investigation into royal investments commented: ‘No aspect of the Windsor family’s wealth is more secret than its shares and investments… for decades royal investments were concealed by a shell company that, archives reveal, was created in order to shelter the queen’s “embarrassing” private wealth from public scrutiny’. A speculative estimate gives a present figure of investment wealth of £142m.

In relation to ‘secrecy’ it’s worth noting that in 1998 the then Auditor General, Sir John Bourn, responsible to Parliament for identifying waste and inefficiency in public spending, won a six year long battle to investigate the finances of the royal household finances, and was responsible for making his National Audit Office a feared institution in Whitehall. His scrutiny of royal finances then revealed scandalously ‘eye-watering’ expenditures on foreign travel, for example including a bill for £252,000 when Charles, then Prince of Wales, visited the Caribbean with a party of 48.

… or Imperial Loot?

What emerges from the discussion is the considerable lack of clarity between what rightly belongs to the state, and therefore in principle the taxpayer; and what is regarded as in the private possession of the royal family, and simply (and sometimes literally) their business. But in practice there appears to be a considerable grey area where rightful ownership of gifts is almost impossible to determine, given the deliberate secrecy in which the monarchy’s many financial affairs are shrouded.

But perhaps of more significance now when considering ‘ownership’ is where these possessions and assets came from. Here we need to consider the role of the monarchy in the wider framework of what became the ‘British Empire’. This has been a more actively commercial role than has been generally appreciated; kings and queens from the Stuarts through to the Hanoverians were often deeply financially involved in colonial and imperial projects. This also meant that they benefited from the transatlantic trade in slaves, and shared in the profits from trading activities dependent on slave labour plantations, connections now proven by recent research. A historian in this field (Dr Brooke Newman) has written that ‘there is no doubt that the centuries of investment in African slavery and the slave trade, contributed hugely to building the status, prestige and fortune of today’s royal family’.

So far King Charles has avoided any acknowledgement of, or apology for these connections, though he has spoken more generally of his ‘personal sorrow’ at the appalling suffering occasioned by slavery. He also followed this fudged line on a recent visit to Kenya, referring to the ‘painful’ episodes in Britain’s colonial relationship with Kenya, i.e., the extensive use by British colonial officials during the 1950s Mau Mau uprising of torture and brutal beatings, in some cases resulting in the deaths of detainees. Although these colonial crimes were admitted to by Foreign Secretary William Hague in 2012, and the British government have already paid substantial compensation after legal action by former Mau Mau detainees, Charles could not bring himself to openly acknowledge these crimes, still less to say sorry for them.

There has never, in any case, been more general royal acknowledgement that ’empire’ involved military conquests and often brutal oppression, exemplified best by the depredations of the British East India Company in India across the eighteenth and nineteenth centuries. Enormous fortunes were made, bringing the word ‘nabob ‘ into the English language. These oppressions and exploitations inevitably triggered a backlash, centred on the Indian Mutiny of 1857. This led to the British state taking formal control and maintaining its influence less by military force than by working through one-sided partnerships with the Indian princes, especially the Muslim Mogul dynasty. The celebrated Victorian British Empire, with Queen Victoria holding formal sway over as much as a fifth of the world’s population, regarded India as its ‘Jewel in the Crown’.

Here we might look at the story of the real jewel in the Crown, a story told by Anita Anand, co-author with William Dalrymple of a history of the Koh-i-Noor diamond, the largest in the world. In 1849 the East India Company forced the 10 year old boy Maharajah of Lahore,  Duleep Singh, to sign over to the company effective control of his wealthy kingdom, and also compelled him to make a gift to Queen Victoria of the Koh-i-Noor diamond that he had inherited from his father Ranjit Singh. Much later, now a wiser adult, he called Queen Victoria Mrs Fagin after Charles Dickens’ fictional thief, and died, ‘broken and broke’, in a Paris hotel at the age of 55. Anand writes that ‘his story, for many, is an allegory of colonialism’.

The Koh-i-Noor now sits in a Crown made for the then Queen Mother in 1937. The rightful ownership has long been a matter of deep controversy, with repeated requests for its return both from India and Pakistan. But the royals, and indeed the British government, show little appetite for giving up their favourite baubles, a typically tin-eared response by British beneficiaries of the bitter fruits of empire. So yes, not so much acceptable gifts as imperial loot, a fine British tradition to which people prefer to turn a blind eye.

Let’s Be Charitable

Another bit of blind-eye-turning seems to have gone on in relation to large donations made to Charles’ well established charities while he was Prince of Wales. These are well known charities and do much good work, supporting hundreds of community and other projects. But the processes of donation were brought into the cold light of day in a couple of high profile cases. One case reported in 2022 involved substantial cash donations of up to £3m between 2011 and 2015, from a former Quatari Prime Minister. The cash gifts, reportedly (the Times) ‘stuffed in Fortnum and Mason shopping bags and a small suitcase ‘ were personally received by Prince Charles, doubtless with a somewhat bemused thank you smile on his face, before being passed on to his Charitable Fund. No illegality was involved in the transactions, though it was publicly condemned as ‘a grubby business’.

An earlier, more dubious, affair implicated a close aide of Prince Charles, Michael Fawcett, in the offer of a knighthood and British citizenship to a Saudi billionaire, in return for generous charitable donations to the Prince’s Foundation (another charity), described as being for ‘restoration projects of particular interest to Prince Charles’. Prince Charles very quickly declared his own innocence, and it was Fawcett, who had worked for Charles for 40 years, who bit the bullet and resigned his position as Chief Executive Officer of the charity. Neither knighthood nor citizenship was obtained. After significant public complaints the Metropolitan Police launched a ‘cash-for-honours’ investigation under the Honours (Prevention of Abuses) Act 1925, brought in after Lloyd George’s several abuses. When the Met, after an 18 month inquiry, declared the discontinuation of its investigation without any further action, former Lib Dem MP and Minister Norman Baker expressed astonishment in light of the known evidence: ‘the suspicion must be that no action is being taken because of the nature of the potential offender…[and] they have not even investigated the main suspect’.

Whither The Monarchy?

Would that this was a more serious question than it is in our present political system. No government has yet grasped the nettle of reform of the more preposterous elements. In a modern state and society there is surely no room for the offensiveness of a hereditary family at the head of affairs, even less when that actual family has now proven itself so dysfunctional, and so essentially self-interested. Their extreme wealth and privilege is obscured and too often deliberately concealed, as they preside over a society in which almost as many of their subjects live officially in ‘destitution’ as did under Queen Victoria. Morally, and politically, we can no longer afford them, or the archaic and extravagantly wasteful picture they present to the rest of the world.

But who will rid us of them? Of course, the whole constitutional system is crying out for reform, from a now defunct House of Lords, and its associated honours system that is no longer fit for purpose, to an electoral and parliamentary system that is long past its sell-by date. What is widely described as a broken polity badly needs to be reshaped, and our dangerous reliance on ‘conventions’ that are now rarely honoured must give way to a carefully thought-out and written constitution. Easier said than done, for such systemic change takes both time and strong political will, and the hope must be that a rising younger generation will want to take forward these challenges. One hope is that they will consign the monarchy to the dustbin of distant history to which all monarchies surely belong.

Could this lead to a British republic before too long? Judged by the almost hysterical response to the pressure group Republic’s attempted Coronation protest, it might be a rather gradual process.

[But please, please, not the fudge of a bicycling monarchy. I don’t think I could take the sight of Charles and Camilla, crowns askew, taking a tandem down The Mall!]