One's in the money! Why Prince Charles's secret 20-year campaign could make him the richest king in history (2024)

By Geoffrey Levy for MailOnline
Updated: 18:20 EST, 31 December 2010

The bombshell was one no one noticed. Four months ago, as George Osborne made his first Budget speech to the Commons unleashing the biggest public spending cuts in living memory, he slipped in a brief - and almost unnoticed - passage about the financing of the Royal Family.

The Chancellor said he intended to scrap the Civil List system that has been in place since 1760 - and that to most people has worked pretty well - and replace it with a new one.

To the uninitiated, this sounded like a welcome piece of computer-age modernisation. But, in fact, it is the very opposite.

Far from bringing the royal finances into the 21st century, the Chancellor is winding the clock back more than 251 years and re-establishing the system that existed before 1760 - the year profligate George III was so much in debt he handed income from crown land to the Government in exchange for a Civil List, an annual payment Parliament has to approve.

For the next three years, as things stand, the Queen’s annual payment has been frozen by the Government at £30million. But from 2013, the Civil List will be scrapped and the monarchy will be financed by what’s been titled the Sovereign Support Grant - comprising a share of the profits made by the Crown Estate, a vast £6.6billion property empire where the profits go to the Treasury. Initially, that share of the Crown Estate’s profits was to be 15 per cent, but not surprisingly it’s now being negotiated down.

So just how did this hugely significant development in royal financing come about?

Step forward the Prince of Wales, whose constant stream of handwritten letters to Government ministers urging them to consider various issues are known in Westminster as ‘black spider’ memos.

For Charles, the Chancellor’s announcement was the culmination of a personal campaign he has waged for more than 20 years.

Indeed, it was the spendthrift heir to the throne - whose 149 staff include three chauffeurs and 25 domestic ‘personal’ staff of butlers, dressers, chefs and valets, and who spent £125,000 on his gardens at Highgrove last year - who first came up with the idea in the late Eighties.

Charles, whose extravagance has even been criticised by the Queen, wasn’t playing things by halves. His original proposal, presented to the Thatcher government (only to see it refused), was that the entire income from the Crown Estates should revert to the sovereign, just as it did before George III was forced to strike a deal with ministers.

The Estate’s income is immense: £211million last year and it is expected to rise to a whopping £450million by 2020. It was already approaching £60million - no small sum - when, as Charles’ official biographer Jonathan Dimbleby put it back in 1994, he ‘floated the notion’ after ‘his back-of-an-envelope calculations (showed) it would more than match the total government expenditure on the monarchy’.

The prince not only wrote letters detailing his big idea, but also initiated talks with the Thatcher government. His view, as explained by one of his circle involved in the discussions, was that ‘it would have been enormously effective in making the household independent and vigorous, even better in terms of financial management and good for the standing of the monarchy as an autonomous institution’.

Quite so. And it would also have turned the future King Charles into probably the richest monarch in British history. This would have helped a man who has been criticised by his own mother for employing too many servants and taking too much equipment (his personal white leather loo seat, for example) whenever he travels.

To be fair to Charles, he understandably deplores the ‘cap in hand’ element that tends to characterise the negotiations that take place every ten years between palace advisers and Government over what is inevitably described in Left-wing newspapers as the Queen’s ‘pay rise’.

‘Charles sees it as a deeply unedifying spectacle that belittles the Royal Family,’ explains one of his circle. ‘He feels it is unseemly for the monarchy to have to go round with a begging bowl. He has always wanted to put an end to that.’

But the questions is, why has George Osborne apparently acceded to Charles’s demand, particularly at a time of national austerity? Did he simply succumb to the Prince’s concerted campaign?

One close friend has said that he would be ‘hugely surprised’ if Osborne had not been in receipt of those urgent ‘black spider’ memos since becoming Shadow Chancellor under David Cameron in 2005.

Osborne is said to have been persuaded by the ‘cap in hand’ argument and, for his part, says the change in the way the royal family is funded is simply to ensure Chancellors who succeed him ‘will not have to return to the issue’.

But there is also a deep suspicion in certain political quarters that Charles is intent on feathering the royal nest. There is concern, too, that reverting to the old system will destroy a process that serves to underline the crucial democratic principle that the monarchy exists only by the consent of the people.

Even King George V’s keeper of the privy purse, Sir Frederick Ponsonby, declared in 1922 that it was ‘an essential part of the constitution that the sovereign should be dependent on Parliament for the Civil List and should not receive money direct from the crown lands’.

As Prince of Wales, Charles receives an independent income from the Duchy of Cornwall – a comforting £17.1million last year, before tax. As king, he would no longer get this, but instead receive the profits from the Duchy of Lancaster — yet another land and property portfolio (172,000 acres of land, estuaries and rivers, huge Stock Exchange and property investments, with the most valuable possession being the Manor of Savoy in London, an area between the Strand and the Embankment) held in trust for the royals.

The duchy provided the Queen with £13.2million last year (which she uses to cover the expenses of her immediate family who carry out royal duties, including her children Andrew, Edward and Anne). Her income from this source has risen by an impressive 125 per cent in the past ten years.

But neither of the two duchies is more than a minnow compared to the vast Crown Estates, with assets ranging from Regent Street in London’s West End shopping area, Ascot racecourse and Windsor Great Park, 265,000 acres of farmland, as well as ownership of our national seabed stretching out 12 nautical miles around Britain.

But critics of his vision fear that, free from constraint by parliamentary control, he would be free to indulge himself by interfering in national issues instead of adhering to the crucial tradition of strict impartiality so coolly maintained by the Queen. Professor Robert Hazell, Professor of Government at University College London, says: ‘It seems a retrograde step. It would remove Parliament’s role in approving the size of the Civil List.’

Even by taking the proposed 15 per cent of the Crown Estate’s profits, the sums projected in the future are so large that no one — not even George Osborne — believes it is sustainable.

At such a rate of growth, the royals’ income would more than double to around £67.6million in ten years — just at the same time as millions of subjects will have been forced into a decade of belt-tightening. There wouldn’t be too much ‘consent of the people’ in that.

Sensibly, Osborne — pressured by Lib Dems in the Coalition and aware of accusations of unfairness at a time of austerity everywhere else — has insisted on limits and has decided that the sums paid under the new system must be capped.

Conversely, in the highly unlikely circ*mstance that the Crown Estate’s earnings might fall, there will also be a safety-net minimum payment. How high and how low these figures will be is yet to be decided, although I understand that talks between Government ministers and palace aides are already getting under way.

But it’s difficult to avoid the conclusion that a system that has existed for 251 years seems suddenly to have been replaced by something akin to chaos.

One wouldn’t expect the Prince Charles to accept blame for this mess, even though the new payment system is his own personal victory. But you can bet on one thing — it won’t stop him writing those ‘black spider’ memos.