ROYAL SLICE OF BREAD WHY THE QUEEN ASKED FOR AN INCREASED CIVIL LIST

Press, Volume CXV, Issue 33774, 21 February 1975, Page 12

ROYAL SLICE OF BREAD WHY THE QUEEN ASKED FOR AN INCREASED CIVIL LIST

1 From the "Economist") I Reprinted bi) arrangement) The Queen’s case for an increase in the Civil List was simple enough: the cost of living index went up by 11 per cent in_the three years since her money was last fixed, at the beginning of ll'i'J. and n<> one could argue that inflation will be anything but severe this year. About three-quarters of the a year now to i tl.lm — paid to her in the Civil List goes on wages and salaries, which have been rising even faster than prices. The Royal trustees (her treasure! Chancellor of the Exchequer and the Prime Minister) have inevitably found expenditure outrunning income from the Government.

But the Queen's financial position is a little more intricate than that. She has (four sources of financial (support. First, about threei quarters of the total costs of! I monarchy are already borne I ion ordinary departmental I votes: the Royal Flight, the ; Royal yacht Britannia (in ithe defence budget), even the upkeep of the Royal palaces (which is paid for directly by the Department of the Environment). Not all these are for her, sole benefit: senior Government Ministers use the Royal Flight, while the upkeep of, say, Kew Palace is hardly of direct benefit to the Queen. That is why her' supporters argue that, however fast the Civil List has, to rise to keep pace with in-j flation, the costs of support ! ing the monarchy are still a’ bargain. ; Every Sovereign, at the! ! beginning of his or her: j reign, does a deal with the l Government by which the! Crown estates’ revenues go I I straight into the exchequer, i and the monarch receives I ithe annual civil list in re-; turn. This dates from the; reign of Queen Anne when, at a nadir of mis- ; management, the Crown estates brought in only £6000; (a year. In 1973-74, the net! revenues of the Crown estates were £5.2m. The Civil List, plus the bills paid direct by the Government departments, still leave something of a profit to the exchequer. But the Civil List is only the second of the Queen’s sources. The third is the Privy Purse, which is filled by the revenues of the Duchy of Lancaster: the annual total for those is $325,000. The duchy consists of some 52,000 acres, mostly > of farmland, which have always been kept separate from the crown estates. The , i fourth is her n private ! fortune, the size of which is i never divulged: the Queen only went so far as to say, when the Civil List was last considered by a select committee of M.P.s in 1971, that i rumours that it was in the order of $5O million y :rei "wildly exaggerated.”

Palace upkeep The distinctions between the four corresponding types of expenditure are singularly tortuous. The Department of the Environment’s bill for upkeep of the palaces includes, for example, repairs to furniture; but repairs of other household good sare borne on the civil list. The Government meets the bill for her stationery (the Palace dispatches about 150,000 letters a year) but newspapers come out of the Civil List.

Electricity is paid for by the Department of the Environment. cars out of the Civil List. State visits are financed by the Government, ordinary official entertaining (including the cost of all those garden parties) by the Civil List. The expenses of the Royal household (siaff. treasurer’s department, Lord Chamberlain's department, archives, the Royal Mews) come out of the Civil List, but the private expenses of being Sovereign (clothes, robes and uniforms, for example) come out of the Privy Purse. The Civil List used to make a contribution of £60,000 a year to the Privy iPurse; but’as the revenues of the Duchy of Lancaster had soared since her accession. the Queen asked for this to be discontinued when the Civil List was revised.

The palaces, the jewels, ! the stamp collection, the I pictures are inalienable j Royal property. Sandringjham and Balmoral are not. George VI had to buy both I from his brother when he abdicated: he did not have jto buy Buckingham Palace. | Their upkeep is paid for out |of the Privy Purse; the (alterations to Sandringham, which have now been shelved, would not have been paid for either by the Department of the Environment or by the Civil List, but out of the Privy Purse or the Queen’s other income. Tax freedom The last time the Queen ran into debt on the Civil List, she met the deficit (which over a succession of years amounted to £600,000) out of the Privy Purse. She has done so again this time, and offered to disgorge a further £150,000, reducing the Government’s extra expenditure to £270,000. It is, after all, only semi-private income; and at least its size is known.

When the Queen managed to live within the Civil List (for the first 20 years of her reign it remained at £475.000 a year), there was little pressure for her to reveal her private income. But now there is, and for a reason. The Queen enjoys unique tax freedom. She pays rates on Sandringham and Balmoral; she had to pay property tax and select employment tax. But she pays no direct taxes at all. Nor did her private estates bear death duties. The value of this advantage is not known.

All other members of the Royal family are liable for income and surtax (though between 80 and 100 per cent of their own Civil Lists are allowed, tax-free, as expenses), except that the income the Prince of Wales gets from the Duchy of Cornwall — about £BO,OOO a year — is automatically taxfree.

The gap in wealth between the Queen and most even of the richest private citizens has widened in the past half century. This is not only because the business of monarchy requires j the upkeep of enormous! s e m i-private residences,

(whose bill must naturally h« met by the State, but because of her frt >dom from tax There is nothing worse than a shabby monarchy, land many of Her Majesty's citizens would rather that she had the cash to run a few racehorses than that, say, M.P.s had the cash for (research assistants. But the Queen is, willy-nilly, tn the hands of Parliament, and she 'is going to find it increasingly difficult to extract increases from it without divulging the indirect advantages of her job. Private fortune The Queen’s private fortune is unlikely' to be vast. Her acreage at Sandringham and Balmoral does not put her in the big league, and her inheritance cannot have (been enormous. Queen Victoria. who amassed considerable wealth through the [wills of enthusiastically loyal citizens, left her money to her younger child* [ren. ; Since then, successive monarchs have freqent ly (been strapped for cash. The ■ Queen would no doubt find j disclosure excessively distasteful, but may reach the (point where she has a [choice between that Snd (waiving the tax concessions altogether. Disclosure might satisfy M.P.s but it would not thwart the danger of perennial rows over the Civil List. So there were three possible solutions. One was to index-link the Civil List: but M.P.s might have found it a little hard to give this unique advantage to the Queen (though that would !no doubt be more popular (than giving it to themj selves.). Another was to Transfer more of her expenditure to ordinary de- ( partmental votes. The third was to create a government 'department specifically re- ( sponsible for the business of monarchy, with its own (vote and responsible Minis|ter in Parliament. I The second is both the : most sensible and traditional: (every time a Civil List has ibeen fixed, more of the bills iof successive Sovereigns i have been transferred to departmental votes, starting with the salary of the Speaker of the Commons. The expense of State visits was transferred in 1972. Mr Wilson’s plan for the future to provide grant-in-aid to the Royal trustees, which would be included in the estimates and voted by Parliament just like other government expenditure, is a subtle way of shifting the bill which M.P.s would do well to endorse.

The system of allowing a [little extra for inflation, to be saved up in the fat years and paid out in the lean [(£170,000 a year in the 1972 settlement), has been destroyed by rapid inflation. The 1971 Select Committee thought their settlement [could last 10 years, and it [has lasted three. The Queen extracts singularly good value out of the Civil List; I but the constant beggar is 'given no praise for thrift.