The coalition led by Cameron immediately had to come to grips with a brutal recession compounded by Labour’s legacy of government spending that had expanded from 40 percent of gross domestic product in 1997 to nearly half of GDP by 2010. The new government imposed cuts of nearly 20 percent across the board to slash a swollen budget deficit, and also raised taxes and tuition fees at universities. Students protested in the streets, but otherwise the British public endured the stern medicine after watching the economies of Greece, Ireland, and Portugal nearly collapse under the weight of unaffordable entitlements.
The royal budget was not immune from either scrutiny or action when the ten-year funding for the Civil List expired in 2010. During the twenty years since Margaret Thatcher fixed an annual stipend of £7.9 million to cover the Queen’s duties as head of state, there had been no increases. The original formula had been set higher than the Palace had budgeted because at the time inflation was running above 9 percent. With yearly inflation at a far more modest average of 3 percent through the 1990s, the Queen’s treasurer took the surplus cash and invested it in a rainy day fund that grew to £35.6 million by the end of the decade.
When the Thatcher agreement ended in 2000, Tony Blair froze the Civil List for the following ten years, assuming that the reserve fund would top off the rising costs of running the royal household. By 2009, yearly Civil List expenses had climbed to more than £14 million, largely due to inflation, requiring a £6.5 million annual supplement from the Queen.
When George Osborne, the chancellor of the exchequer, presented his report on royal finances in June 2010, he praised the “careful housekeeping” at the Palace over the previous decade and said that the freeze on the Civil List amount would need to continue for two more years, which would exhaust the Queen’s remaining £15.2 millon reserve fund. In addition, Elizabeth II planned to spend nearly £1.3 million of her more than £13 million personal income from her Duchy of Lancaster portfolio to support the official expenses of three of her four children and other royal relatives working for the “Firm.” (Charles spent £9 million on his “official duties and charitable activities” out of his Duchy of Cornwall income of £17.1 million in 2009.) The costs of security provided by the police and the military for the entire family and the palaces remained a closely kept secret; estimates put it at more than £50 million annually.
In October 2010 the chancellor announced that the Queen’s household had further agreed to cut spending for 2012 by 14 percent, in line with the government’s austerity budget. At the same time, Osborne unveiled a historic change in financing the monarch’s official activities that he had devised in collaboration with Palace officials. Starting in 2013 the Civil List and various government grants will be scrapped. The new arrangement will give the royal household a single Sovereign Support Grant based on 15 percent of net income from the vast Crown Estate portfolio of property and investments that has belonged to the monarchy since the eleventh century. The Queen’s income will be pegged to the profit from two years previously.
Osborne’s solution is elegant in its simplicity and pragmatic in its consequences. It restores to the monarch a portion of the Crown Estate profits that King George III had relinquished in 1760 in exchange for the Civil List stipend. It also removes the need to periodically negotiate a payment plan with Parliament “so that my successors do not have to return to the issue so often,” said Osborne. With its capital value of £7.3 billion, the Crown Estate’s projected net income in 2011–12 of some £230 million is expected to yield about £34 million in 2013 for the Queen’s official business and provide the government treasury with £196 million.
The new arrangement is meant to keep pace with inflation, and will place safeguards on the downside and limits on the upside so the income will not be “adversely high.” Critics have argued that the monarch would no longer be accountable to Parliament, but in fact the Palace agreed for the first time to yearly scrutiny by the National Audit Office, which will report its findings to Parliament. The new system will also permit the royal household to decide how to allocate resources rather than rely on separate dedicated funds for maintenance and travel. Shoring up aging infrastructure will be an urgent priority. Buckingham Palace has been losing pieces of masonry from its facade, and the roof over the ballroom has sprung leaks.
Aside from landmark events and regular entertainments like the annual garden parties, diplomatic receptions, and state dinners, the Queen had already begun paring expenses in various ways. The era of periodic grand balls for friends and family was long over. To recognize two of her ladies-in-waiting, Susan Hussey and Mary Morrison, for serving fifty years apiece, the Queen hosted a low-key private reception at Buckingham Palace in June 2010 called “A Century of Waiting.” She recycled her outfits regularly, and for a state visit to Slovenia in October 2008 she asked Angela Kelly to create a gown for the state banquet out of silver and gold brocade fabric that had been given to her during a visit to the Middle East two decades earlier—a gesture the Palace called “credit crunch couture.” In the autumn of 2010, Elizabeth II announced that she was canceling the annual Christmas party at Buckingham Palace, cutting an estimated £50,000 from her £1.3 million catering and hospitality budget. A headline in the Evening Standard captured the mood: “EVERYONE LOSES … EVEN THE QUEEN.”
THE ROYAL FAMILY’S relations with the press became less troublesome in the first decade of the twenty-first century. The main reason was the disappearance of a parallel court presided over by Diana that fed morsels of information to tabloid favorites. At the same time, the Palace had developed a more sophisticated view of the media. “We have no experts in royal history, but we understand the way the media works,” said one senior official.
Although Philip complained that the Queen read too many “bloody” newspapers, her daily habit has given her a good feel for the press. She had long since learned to sort out what was important and what was irrelevant, and how to distinguish between media opinion and public opinion. The Palace press office reached out to a greater cross section of “opinion formers” as well as local papers, and offered more frequent background briefings. “We are not about demystifying the royal family,” said one official. “It is about telling people what they do.”
As the circulation of newspapers dropped with the rise of the Internet, the Queen’s advisers realized they could get their message directly to the public—and particularly what Palace officials call “the space of young people”—through the monarchy’s website and its YouTube channel. Keeping pace with emerging technologies, the Palace launched its British monarchy Twitter account in 2009, although its use was confined to bulletins about the comings and goings of the royal family. By early 2011 there were more than 100,000 followers of the royal family on Twitter. Four months after its launch on November 7, 2010, more than 300,000 “likes” were registered on the Queen’s Facebook page.
But the social media only softened the lash of Britain’s national newspapers, which remained more influential than the press in the United States. In 2010 and 2011 their prime target was Prince Andrew, Britain’s special representative for trade and investment since 2001. His global peregrinations earned him the nickname “Air Miles Andy,” and he was severely criticized for his contacts with unsavory dictators in places like Kazakhstan and Azerbaijan, not to mention the American billionaire Jeffrey Epstein, who had served time in prison for pedophilia. Reporters routinely questioned the value of Andrew’s unsalaried role, which cost the British government nearly £600,000 annually for overseas travel, hotels, and entertaining—plus his £249,000 annual allowance from the Queen to run his private office.
Government officials credited Andrew with helping British firms win multibillion-pound contracts for such projects as the Dubai metro and jet engines for Air Asia. His lobbying for British industry was most effective in Asia and the Middle East, where he was friendly with leaders such as Jordan’s King Abdullah II, with whom he hunted in Morocco and Tanzania. “It’s not about the po
wer of royalty, it’s about personal relationships,” said Andrew. “If you know the right people you can have a positive outcome.… If you are competing with other countries, you have to deploy as many assets as you can. I am one of those assets.” Nevertheless, Andrew’s questionable associates and poor judgment disturbed the Queen and her advisers, and in July 2011 he stepped down from his job after serving for ten years. He still intended to promote British business, but on an unofficial basis, while focusing on helping develop apprenticeships for young people.
Andrew’s image had also been badly dented when his ex-wife got caught a year earlier exploiting her husband’s position in a mortifying episode that recalled the royal family’s misadventures of the late twentieth century. After their divorce in 1996, Fergie had been more than £3 million in debt, but she had returned to financial solvency by pursuing an array of lucrative business ventures. She even won the approval of her former mother-in-law, who included her in a weekend at Balmoral in August 2008 with Andrew and their daughters, Beatrice and Eugenie, the first time the outcast duchess had been to the royal Highland retreat since her hasty exit in 1992.
Fergie continued to maintain a profligate lifestyle, however, employing eleven full- and part-time staff, compared to Andrew’s five. Her finances began to implode again in 2009 as her income declined and her debts grew to more than £2 million. In the spring of 2010 the fifty-year-old duchess was in a desperate mood when Mazher Mahmood, the News of the World reporter who had entrapped Sophie Wessex nine years earlier, enticed Sarah into a sting by posing as an Indian businessman. With hidden cameras recording the meeting in a Mayfair apartment, Fergie sold access to her former husband in exchange for £500,000, including a $40,000 cash down payment that she carried off in a computer bag. She repeatedly emphasized that Andrew “never does accept a penny for anything” and said she only wanted “a lick of the spoon.”
In an effort to defuse the potential damage from the incriminating footage, which was an instant sensation on YouTube, Fergie quickly issued a statement saying she was “sincerely sorry.” She explained that her finances were “under stress,” but said this was “no excuse for a serious lapse of judgment.” Both she and Andrew said that he had been unaware of her contacts with the phony businessman. After consulting with the Queen, Andrew covered a portion of his ex-wife’s debts and helped her restructure the rest. That July Fergie fired all her employees and agreed to operate under the supervision of Andrew’s office.
The following month, the Queen and Philip gathered their children and most of their grandchildren (William and Harry were off on military duty) for a nostalgic ten-day Western Isles cruise aboard the Hebridean Princess to celebrate the sixtieth and fiftieth birthdays of Anne and Andrew. The guest of honor was eighty-three-year-old retired nanny Mabel Anderson, who lived rent-free in one of the Queen’s grace-and-favor houses in Windsor Great Park and remained close to her former charges, particularly Charles.
For the first time since the royal yacht was decommissioned in 1997, the family re-created Britannia Day by stopping at the Castle of Mey, where Charles customarily stayed in his grandmother’s faithfully preserved pale blue bedroom for a week at the beginning of August. On August 2, 2010, Charles assumed the role of his late grandmother and hosted the family for a tour of the castle, proudly showing off various improvements he had overseen—the new visitor center as well as the recently built turret in the southeast corner of the walled garden. The Queen queried the staff about visitor numbers, inquired about the new radiant heating on the ground floor of the castle, and climbed up the turret to look out at the Orkney Islands through a monocular. After their tour, the royal party sat down to the traditional lunch, which featured oeufs Drumkilbo, just the way the Queen Mother had served them.
IN HIS SEVENTH decade, Prince Charles had not only found contentment in his new life with Camilla, but fulfillment in the job he had invented to give meaning to his role as heir to the throne. The Prince of Wales doggedly promoted a wide-ranging agenda embracing architecture, historic preservation, the environment, sustainable farming, rain forest conservation, health, education, and job training. A number of his views, such as the value of organic produce and the need for human-scale architecture to build new communities, were initially derided but later moved into the mainstream. He raised more than £110 million each year for his personal charities, which have extended his reach to projects in China, Afghanistan, Guyana, and Jamaica.
He had grown more comfortable in his own skin and committed himself to establishing his legacy through the job that, as he frequently said, “I made up as I went along.” “He has made a full life for himself,” said Nancy Reagan. “He does so much more than any previous Prince of Wales.” Yet his approach to his role is diametrically opposed to his mother’s more deliberate operation at Buckingham Palace. Much of what the Queen does she is advised to do, while her firstborn son tends to do mainly what he wants to. Charles “is high octane because he is so driven,” said one of his aides. “He is always at full tilt.”
The differences in temperament between mother and son are striking. “He is probably an instinctively glass half empty person, while she is more a half full one,” said her cousin Margaret Rhodes. The Queen “has no illusions about what can and can’t be changed,” said her former press secretary Charles Anson. “She has an acceptance of the way life deals its cards that is rare in the Western world, and stems partly from her religious conviction and partly from her life experience.” Prince Charles is more emotional than the Queen, easily offended and short-tempered, with an inclination to brood and to need reassurance. “Camilla soothes things and anticipates what could go wrong,” said Anne Glenconner.
He is more impressionable than his mother, and over the years was influenced by gurus such as Laurens van der Post and the mystical poet Kathleen Raine. But while the Queen can be persuaded by a well-crafted proposal, Charles dislikes advice contrary to his beliefs. There are few, even among his close friends, who feel comfortable challenging him for fear of being judged insensitive or disloyal. His father, by contrast, welcomes robust argument. While Philip can squash an opponent on occasion, he is more than happy to accommodate the views of someone he feels has mastered his brief.
Charles is also less direct than either of his parents, who can be counted on for a straight answer. “You sense he maneuvers,” said a longtime friend of Camilla. “People have to maneuver with him.” Charles enjoys gossip more than the Queen (although she likes political scuttlebutt) and wonders whether “that person is for or against me, in this or that camp,” said one of Elizabeth II’s former advisers. “The Queen doesn’t think that way. It is more, ‘What is the problem? What do we do?’ She only wants to know who is in what camp if it is obstructing a decision that needs to be taken.”
No one would deny that the Queen sets high standards for her household, but Charles is more extravagant. Elizabeth II knows what everything costs and economizes when necessary. Guests at routine Buckingham Palace receptions are served wine, potato chips, and nuts, while at Clarence House they get gourmet hors d’oeuvres, and the dinner parties have elaborate floral displays and theatrical lighting. “It is fair to say when he feels something should be done well, he doesn’t stint,” said Patricia Brabourne. When he goes to stay at Sandringham for a week on his own, Charles brings along vans filled with vegetables and meats from Highgrove, even though there is a farm on the Norfolk estate. At dinner parties, he is known to eat a different meal from his guests, sometimes with his personal cutlery.
Such behavior may seem persnickety and spoiled, but Charles has a capacity for empathy that was underestimated in the Diana era. His ability to engage with people is “as good if not better than the Queen,” said a former courtier. “He has natural warmth with the Queen’s sense of duty and Philip’s ability to make a guy laugh.” He is more imaginative and intuitive as well, and his thoughtfulness is legendary. When Anne Glenconner’s sister got cancer, Charles wrote her a seventeen-page lette
r with ideas about alternative treatments.
While the Queen has four private secretaries, Charles has eleven—nine full-time and two part-time—plus separate directors for each of the twenty charities he founded and a commercial enterprise that produces his Duchy Originals line of organic products ranging from Sicilian Lemon All Butter Shortbread to Mandarin Zest and Rose Geranium shampoo. All the profits, totaling more than £6 million in two decades, have been donated to charitable causes.
Along with Charles’s independence has come a boldness to proselytize for his causes in speeches, publications, and regular letters to government ministers in his distinctive scrawl. “There is nobody I admire more for his energy, ambition and enthusiasm,” said Sir Malcolm Ross, who served for two years as Charles’s Master of the Household after eighteen years in the senior ranks at Buckingham Palace. “He wants to save the world. The problem is he wants to save the world this afternoon and every other day.” In recent years Charles has urged that the global economic system be overhauled and questioned the values of a materialistic consumer society, denounced climate change skeptics, called for a “revolution” in the Western world’s “mechanistic approach to science,” and praised Islam for its belief that there is “no separation between man and nature.” He has twice taken on one of Britain’s most prestigious architects, Sir Richard Rogers, and derailed his multimillion-dollar projects for being incompatible with their neighborhoods, much to the relief of nearby residents.
His outspokenness has periodically put him at odds with his family, especially his father. After Charles first condemned genetically modified crops in 1998 for jeopardizing the delicate balance of nature, Philip vehemently disagreed on the grounds that such crops are necessary to feed the world. In 2000, when Charles intensified his attack on bioengineered agriculture, both his father and Princess Anne publicly took issue with his position, which his sister witheringly called a “huge oversimplification.” Philip pointed out in an interview with The Times that “we have been genetically modifying animals and plants ever since people started selective breeding.”
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