The Firm: The Troubled Life of the House of Windsor by Penny Junor Page A
Authors: Penny Junor
Tags: Biography & Autobiography, Royalty
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pockets the rest to meet general government expenditure.
Even with my limited grasp of mathematics, the Queen is not the leech we have been led to believe. She does not cost the country a brass farthing, but is actually saving the taxpayer something like £114 million. If that money wasn’t coming from the Crown Estate you can bet your boots it would come from the taxpayer, and, indeed, if the Queen went mad and splashed out on a new aircraft, or a flashy new coach and spent too much the taxpayer would have to pay more for the shortfall. Parliament decides how much money the sovereign should have, and in that respect acts like a trustee of an old family trust, which in a constitutional monarchy is just as it should be. Parliament needs to make sure the Queen isn’t more of a financial burden than she has to be, not because it has to pay for her if she is, but because the more money there is left over after paying the Civil List, the more there is for general expenditure.
When Airlie arrived the Civil List was paid and reviewed annually, and this had been the arrangement since the 1970s when inflation had started running rampant. Some years it was running in double figures and each year there were increases in the Civil List, announced in Parliament, in line with inflation. From the public relations point of view this was bad news. It looked as though the Queen was being voted a 10 or 15 per cent pay rise, which, of course, was nonsense but made a very provocative headline. In practical terms it was disastrous too; government was so heavily involved in the detail and the everyday running of the organization, checking and rechecking expenditure to the point where it was impossible to make any long-term decisions and impossible to do what they wanted to do with the money. Airlie and Peat wanted the Treasury off their backs and were determined that the royal household should be master of its own destiny.
Their plan was to get the Civil List agreed for a ten-year period and be allowed to manage the money themselves, free from government interference. The Treasury agreed in principle; the difficulty was agreeing a figure, which, even if inflation continued to rise, would not leave the household short of funds. The Treasury’s refusal to acknowledge the existence of inflation made life difficult, but they found another way. They calculated the average rate of inflation during the past ten years, which was 7.5 per cent – acceptable to the Treasury – and settled on a figure for the ten-year period from 1 January 1991 of £7.9 million. If they had taken too much money, there was a deal that the surplus would roll over into the next ten years’ allowance. The Earl of Airlie took a punt. At the time, inflation was running at 9 per cent. If it had continued to rise the household would have run out of funds before the ten years were up and caused untold damage to the monarchy. As it was, inflation went down during the ninetiesand David Airlie was roundly praised for having struck such a good deal. Little did anyone know how very concerned he was that it might so easily have gone the other way.
Having stayed at the Palace on secondment from his own family firm for three years to implement the first round of changes and to work on the Civil List negotiations, Peat was persuaded to join the household for another three years to see in those changes which were announced by Margaret Thatcher in the House of Commons in 1990. For the first three years he had been called Administrative Adviser; but for the next three years, as a member of the household, he was called director of Finances and Property Services, a new title Airlie created to oversee a whole new business that was another calculated gamble.
Having established that the household had a ten-year Civil List to manage, it seemed sensible to bring the maintenance of the occupied palaces, run by yet another government department, under Palace control. And so they created a
Even with my limited grasp of mathematics, the Queen is not the leech we have been led to believe. She does not cost the country a brass farthing, but is actually saving the taxpayer something like £114 million. If that money wasn’t coming from the Crown Estate you can bet your boots it would come from the taxpayer, and, indeed, if the Queen went mad and splashed out on a new aircraft, or a flashy new coach and spent too much the taxpayer would have to pay more for the shortfall. Parliament decides how much money the sovereign should have, and in that respect acts like a trustee of an old family trust, which in a constitutional monarchy is just as it should be. Parliament needs to make sure the Queen isn’t more of a financial burden than she has to be, not because it has to pay for her if she is, but because the more money there is left over after paying the Civil List, the more there is for general expenditure.
When Airlie arrived the Civil List was paid and reviewed annually, and this had been the arrangement since the 1970s when inflation had started running rampant. Some years it was running in double figures and each year there were increases in the Civil List, announced in Parliament, in line with inflation. From the public relations point of view this was bad news. It looked as though the Queen was being voted a 10 or 15 per cent pay rise, which, of course, was nonsense but made a very provocative headline. In practical terms it was disastrous too; government was so heavily involved in the detail and the everyday running of the organization, checking and rechecking expenditure to the point where it was impossible to make any long-term decisions and impossible to do what they wanted to do with the money. Airlie and Peat wanted the Treasury off their backs and were determined that the royal household should be master of its own destiny.
Their plan was to get the Civil List agreed for a ten-year period and be allowed to manage the money themselves, free from government interference. The Treasury agreed in principle; the difficulty was agreeing a figure, which, even if inflation continued to rise, would not leave the household short of funds. The Treasury’s refusal to acknowledge the existence of inflation made life difficult, but they found another way. They calculated the average rate of inflation during the past ten years, which was 7.5 per cent – acceptable to the Treasury – and settled on a figure for the ten-year period from 1 January 1991 of £7.9 million. If they had taken too much money, there was a deal that the surplus would roll over into the next ten years’ allowance. The Earl of Airlie took a punt. At the time, inflation was running at 9 per cent. If it had continued to rise the household would have run out of funds before the ten years were up and caused untold damage to the monarchy. As it was, inflation went down during the ninetiesand David Airlie was roundly praised for having struck such a good deal. Little did anyone know how very concerned he was that it might so easily have gone the other way.
Having stayed at the Palace on secondment from his own family firm for three years to implement the first round of changes and to work on the Civil List negotiations, Peat was persuaded to join the household for another three years to see in those changes which were announced by Margaret Thatcher in the House of Commons in 1990. For the first three years he had been called Administrative Adviser; but for the next three years, as a member of the household, he was called director of Finances and Property Services, a new title Airlie created to oversee a whole new business that was another calculated gamble.
Having established that the household had a ten-year Civil List to manage, it seemed sensible to bring the maintenance of the occupied palaces, run by yet another government department, under Palace control. And so they created a
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