The value of her portfolio of shares (rumoured to be in blue chip British companies) is much harder to pin down since its secrecy is guaranteed under a mechanism granted only to the world's heads of state known as the Bank of England Nominees whereby any share dealing is conducted through an anonymous nominee company. In 2014 the Sunday Times Rich List put their value at £105m but the figure is highly speculative due to our near complete ignorance of her equity investments.
On the other side of the ledger, the Queen has considerable outlays and like many a parent, she has been obliged to give financial support to her children. Often this has occurred at significant rites of passage such as marriage. When Princess Anne married Mark Philips in 1976, she bought the couple Gatcombe park - the 730-acre Gloucestershire estate of the former cabinet minister R.A. Butler - for £500,000 and a year later lent them the money to buy the neighbouring 600-acre Aston Farm.17 Similarly a decade later in 1986 when Prince Andrew married Sarah Ferguson, the Queen bought them their first home - Sunninghill Park (or as it was soon dubbed "South York") in Berkshire for £3m. Prince Edward's wedding present from his mother in 1998 was the 50-year lease on the 88-acre Bageshot Park near Windsor with its 57-room house which is today worth over £30m. At the time the purchase prompted raised eyebrows at the palace with one courtier wondering why they wanted to live in such a costly Victorian pile.18 In 2013 the Queen also gave Prince William Anmer Hall on her Sandringham estate as a thirtieth birthday present and after a £1.5m refurbishment it will become the country home of the Cambridges.
Ironically it has been the end and not the start of the marriages that have proved the biggest drain on the Queen's bank balance, with her sister and three of her children all getting divorced. As one royal insider put it, "divorce has cost her a fortune". The largest outlay came with the separation of Prince Charles from Diana which reportedly cost her up to £17m as Charles did not immediately have the cash to settle the huge divorce bill (according to his financial advisor he had to “liquidate everything, all his investments.”)19 The divorce of Prince Andrew was less costly since his assets were smaller being a modestly-paid naval officer and the Queen retained ownership of Sunninghill Park before it passed into a trust but she was still required to contribute £400,000 towards the purchase of Birch Hall in Surrey for the duchess and the children. Going further back to the divorce of her sister Princess Margaret in 1976, it was reported that the Queen as part of the settlement had to buy a house in South Kensington for Lord Snowdon which is now worth around £4m and owned by his son and daughter.
The Queen also has to pay allowances to her close family. This arrangement dates from 1992 when it was agreed that parliamentary annuities from the Civil List would be limited to the Duke of Edinburgh and the Queen Mother and that the Queen would refund to the Treasury parliamentary payments to other close relatives. As a result, in the following decade the Queen had to find over £1.5m a year to bankroll her family, although the bill was reduced by the deaths of Princess Margaret in 2002 and the Duchess of Gloucester in 2004 and by the fact that the repayments are tax deductable.20 In 2010, the last year in which full details were provided, she paid Prince Andrew £249,000, Prince Edward £141,000, Princess Anne £228,000, Princess Alexandra £225,000 and the Duke and Duchess of Kent £236,000.
These annuities are paid out of the Privy Purse, the Queen’s private income which is derived from the revenues of the Duchy of Lancaster. The duchy is a hereditary landed estate of nearly 20,000 hectares that has been held in trust for the sovereign since 1399. Today it includes some valuable real estate, the jewel of crown being the Savoy estate stretching along the Strand from the Savoy Hotel to Somerset House. The Queen is not allowed to dip into its capital but she is entitled to its net revenues - an income stream that has grown considerably since the start of her reign. In the last two decades as commercial rents have mushroomed her revenue has grown by almost £10m rising from £3.75m in 1992 to £13.6m in 2014. Between 2013 and 2014 alone the net surplus jumped by a more than healthy 8.5%.
So after paying her relatives around £1.5m in allowances (as well as picking up the bill for Prince William’s constitutional advisor and of course paying her taxes at the top rate of 45%) how does the Queen spend the remaining £5-6m? Much of the duchy money must be consumed in the upkeep of the private residences. Balmoral alone costs over £3m gross a year to run.21 The Queen decamps there for two months every summer and when Tony Blair made his first prime ministerial visit in 1997 he was struck by the number of servants (he was even given his own valet) and the lavishness of the hospitality (all the meals were so large he feared he could put on a stone in weight).22
Despite the rental of lodges on the estate (Connachat cottage is available at £696 a week) and the opening of the house to the paying public (you can pick up a bottle of branded malt whisky for £40 or tea towels for £14.99 a pair) Balmoral has never been a going concern. Its rocky Highland location means there is little arable land. As a result it haemorrhages more money than the Sandringham estate which can offset its high running costs from the rental of farmlands as well as the leasing of game shooting rights.
Notwithstanding their huge maintenance costs, the two royal residences remain extremely valuable land. In 2001 Balmoral house was valued by a Mail on Sunday report at £2.15m and the estate as a whole £14m. Her Majesty’s Scottish holdings also include the nearby Bachnagairn Deer Forest which she originally inherited from George VI in 1952 and then in 1997 paid the Earl of Airlie £300,000 to double the acreage raising its total value over £2.5m. Much more valuable is the 20,500 acre Sandringham estate that was valued in 2001 at £30m - although this figure like all the others for landed assets does not take into account the premium of the royal name which could easily double or treble their value.
This all underlines the fact that the Queen like much of the landed gentry is asset rich and comparatively income poor - although it is difficult to assess her more liquid assets without access to information about the investment interest and dividends which might accrue from her hidden stocks and shares portfolio. More than likely her cash assets have been eaten into by inflation – particularly in the sixties and seventies and again in the 2000’s. It is worth stressing that an important factor in the wealth of a sovereign with a fixed Civil List allowance is whether or not they reign through a period of price stability. George V was lucky enough to live through a period of relatively low inflation (and indeed at times recession) and as such was able to make considerable savings. His granddaughter has been less fortunate.
When it comes to assessing the relative cash and fixed assets of the sovereign, it is also worth remembering that the Queen Mother found herself so short of cash in her long dotage that she had to rely on the Queen to pay for her day-to-day expenditure despite having an estate of assets reportedly worth over £50m. Although the Queen as she approaches her own centenary is not so strapped for cash, there is clearly an imbalance between liquid and fixed assets which has been acknowledged by others members of the family. In 1971 Lord Mountbatten referred to Her Majesty as having a large fortune but then added that the vast bulk of it was in art treasures which brought in no income and which she could never sell.23
It is clear from this stocktaking of the Queen's assets that her wealth - like that of many rich Britons - is largely inherited. But unlike her fellow multi-millionaires, the exact nature of her inherited wealth is complicated by the confusion over whether the assets are purely private or partly public - particularly when it comes to some of her jewellery and artworks. The picture is further blurred by a special privilege granted to the sovereign and senior royals that prevents the public from inspecting their wills and finding out precisely who inherited what. The only way to lift the fog surrounding her inherited wealth is to unwind the chain of inheritance three generations and investigate how a hundred years ago her great-grandfather Edward VII modernised the monarchy and fixed its finances.
2.EDWARD THE CARESSER – 1901-1910
"A typical Englishman – with the lid off"
J.B. Priestley on Edward VII
In death just as in life Edward VII helped drag the British monarchy into the 20th century by turning the succession process into grand spectacle. He was the first sovereign whose body was laid in state in Westminster, establishing a tradition that would be followed by George V in 1936, George VI in 1952 and most memorably the Queen Mother in 2002. His body was put on public display in Westminster Hall on 17-19 May 1910 and an estimated 400,000 people solemnly filed by the catafalque underneath the oak beams of the mother of all parliaments. The queue meandered back four miles as far as Chelsea Bridge and so great was the demand from ordinary citizens to pay their respects that the hall had to be opened at six every morning. Vast crowds also lined the London streets on May 20 to watch in silent tribute the funeral procession. It was one of the grandest gatherings of royalty of all time - as the gun carriage bearing the coffin was escorted on horseback by George V, the German Kaiser and eight kings on its last journey from Buckingham Palace to Paddington Station prior to the burial in a vault in St George’s Chapel at Windsor. Newsreel footage of crowds one hundred yards deep straining to get a last glimpse of the cortege took the spectacle to a wider audience throughout the truly United Kingdom.
Dismissed as Bertie the playboy prince for much of his life he had finally won the respect of the people and been accepted as a serious sovereign. He was now regaled as the father of the nation. A natural showman with his love of uniforms and decorations, he managed to catch the public mood with his embrace of ceremonials and pageantry. His decade on the throne had seen the introduction of many new royal rituals - including a more meritocratic honours system based on the Order of Merit and a revamped state opening of parliament – which were designed to reconnect the monarchy with the people after the austerity of Queen Victoria’s era and the awakening of dangerous republican sentiments. He also established the custom of sending congratulatory telegrams to anyone reaching the age of one hundred.
But before he could even reach the age of seventy, his austerity-averse lifestyle had begun to take its toll on his health. Although no more than five foot seven inches in height, he weighed sixteen stone and had a forty-eight inch girth – a perfect build for his favourite position of goalkeeper in ice-hockey matches at Sandringham. Following a long struggle against emphysema and a host of other lung complaints brought on by his prodigious smoking he collapsed while on holiday in Biarritz in March 1910 and on his return home after a short convalescence he suffered a fatal heart attack at Buckingham Palace on 6 May. It was typical of the man that his last words were about horseracing. On being told by the Prince of Wales that his horse Witch of The Air had won the 4.15 at Kempton Park by half a length, the turf-loving king replied: “yes, I have heard of it. I am very glad.”
As sovereign Edward VII's will was sealed by right. An 1862 statute stipulated that neither the will nor the size of the estate of a monarch could be made public, although it is now reliably thought that Edward’s estate was worth £2 million (over £100 million at today's prices). This was the figure given in a newspaper interview in June 1971 by Sir John Colville, the Queen's former private secretary, based on information supplied to him by an unnamed member of the royal family.1 It is believed, though, that this sum did not include the private residences of Balmoral and Sandringham which were officially valued at £300,000 in 1936 and which if converted into 1910 prices would have pushed up the size of the estate by about £100,000.
But the real mystery of Edward's £2 million plus estate is not so much what was its precise size or indeed who received it under the will but rather how he amassed it in the first place. His lavish lifestyle had drained his bank balance as rapidly as pouring champagne, his favourite tipple, down the sink. So conspicuous was his consumption that the man nicknamed “Tum Tum” often ate a twelve course dinner before tucking into supper. The next morning a brisk breakfast might mean just buttered toast, bacon and eggs, haddock and chicken. It came as no surprise that the epicurean King Edward took great delight in having a potato named in his honour. When not cramming his mouth with food and drink, he found time to smoke twelve large cigars and twenty Egyptian cigarettes a day.
His official biographer revealed that he only just got of debt in 1907, yet we now know that by 1910 he had somehow accumulated a fortune of over £2 million. This would have made him one of the richest men in England. To give some yardstick of his wealth, his friend Leopold de Rothschild - another man close to the top of nation’s rich list thanks to his part ownership of the family bank and his extensive portfolio of landed and equine property - left an estate valued at £1.5 million in 1917, while Leopold’s brother Alfred, another bank director who died the following year, left a sum of £2.5 million.
Bertie’s extravagant behaviour was in part an act of rebellion against the puritan strictures of his father who wanted him to be educated to the highest academic standards and to eschew the raffish lifestyle of his Hanoverian uncles (at Oxford University he was not even permitted to live in college). The straitlaced Prince Albert (known as “the German professor”) famously gave him a severe dressing down when it became common gossip that a woman of easy virtue had been discovered in Bertie’s bed while he was serving as a young officer in the Grenadier Guards camp at the Curragh outside Dublin. The “lady” in question, an actress called Nellie Clifden, would be the first of a legion of female conquests, with the number of royal mistresses alone running to well over fifty.
But the root cause of Bertie's financial woes – and perhaps his overall extravagance - was the fact that he had too much time on his hands. He reigned for less than ten years after coming to the throne in 1901 aged fifty-nine after decades living in the shadow of his indomitable and seemingly indestructible mother ("Queen Victoria," as one wit joked, "keeps reigning and will not let the son shine"). In contrast to the well-rounded apprenticeship that Queen Elizabeth provided Prince Charles and the latitude he was accorded to liaise with all government departments (sometimes to the frustration of the prime minister of the day)2 Queen Victoria refused to give her son any meaningful training for his future role as sovereign and even denied him access to state papers. As an incorrigible gossip, he could never be trusted with state secrets. The Widow of Windsor's obsessive mourning for Prince Albert may also have made her reluctant to put her faith in any substitute royal consort, particularly one she blamed for the premature death of her husband. In retrospect this was both short-sighted and unfair to Bertie who, while no intellectual had a lively mind, spoke French and German fluently and had a genuine interest in diplomacy and international affairs which would be put to good use much later as sovereign with his skilful handling of the Entente Cordiale between Britain and France.
Denied access to the levers of political power, the prince found solace in mixing with those who held financial power. His friends and acquaintances were all immensely wealthy – not just the old money of landed aristocrats like Lord Cadogan and the Dukes of Bedford and Westminster with their steady income stream from metropolitan rents, but also the new wealth from financiers and speculators like Horace Farquhar and Cecil Rhodes who had made fortunes in southern Africa and other colonial territories. When Rhodes was blackballed by the Travellers Club on account of some dubious overseas venture, the king registered his protest by automatically taking his own name off the members’ list. He saw money, according to his official biographer, as a convenient social indicator3 and he also saw how those who had money used it to pursue pleasure beyond their wildest dreams.
When the lustre of his marriage in 1863 to the beautiful Princess Alexandra began to pale Bertie's eye soon wandered. Although it had grown into a genuine loving relationship following the arranged union between the Danish and British royal families, the Prince of Wales's gargantuan appetite could never be satiated by one woman alone and Alexandra's sparkle may have been dimmed by the effect of childbirth and an attack of rheumatic fever (even official photographs had t
o be retouched to enhance her fading beauty). After a major refurbishment to his spacious Pall Mall mansion - which cost him a rumoured £100,0004 and the government a further £60,000 – it soon became the society venue for the raffish Marlborough House set where royalty and peers of the realm brushed shoulders with the parvenu rich and the world of entertainment. Bertie is known to have had adventures with the actresses Nellie Clifden and Sarah Bernhardt, as well as a series of longer affairs with married women including Mrs Lillie Langtry, Mrs Daisy Brook, Mrs Wally Paget and Mrs Alice Keppel – and possibly Mrs Jennie Churchill, mother of Winston. Not for nothing was he known as Edward the caresser.
His pursuit of pleasure, however, did not come cheap. On top of the cost of keeping a string of well-heeled women in the style to which they were accustomed (Alice Keppel among others was showered with jewellery), he liked to go to the races and gamble with rich friends such as Leopold de Rothschild who became almost as well-known as a horse breeder than as a merchant banker on account of his highly successful stud at Ascott. In the 1890s it was de rigueur for the wealthy to breed horses and bloodstock sales became an unlikely venue for high society. The Foreign Secretary Lord Rosebery purchased a future Derby winner (to add to the stud he acquired on marrying the heiress Hannah de Rothschild, a cousin of Leopold's) and several of his cabinet colleagues were like Bertie members of the Jockey Club in Newmarket. It was not lost on politicians and plutocrats (nor indeed royalty) that the turf provided a useful place to connect with the mass of the population. At the time, the Epson Derby was the most sacred event in the sporting calendar - on a par with today's FA Cup Final at Wembley or a Lords test against Australia - and one of the rare occasions when the whole country came together. The Derby-winner was the toast of the nation.
Royal Legacy: How the royal family have made, spent and passed on their wealth Page 3
