Royal Legacy: How the royal family have made, spent and passed on their wealth Read online

  Royal Legacy

  How the royal family

  have made, spent and

  passed on their wealth

  David McClure

  All Rights Reserved

  Copyright © David McClure

  First published in 2014 by:

  Thistle Publishing

  36 Great Smith Street

  London

  SW1P 3BU

  www.thistlepublishing.co.uk

  For Jane and William McClure

  CONTENTS

  PROLOGUE

  1. THE QUEEN’S TRUE WORTH: 2014

  2. EDWARD THE CARESSER: 1901-1910

  3. MARY’S BAD BROTHER: 1910-1922

  4. THE PRINCES AT WAR: 1936-1945

  5. THE PRINCESSES OF NOTHING: 1948-1952

  6. GEORGE AND MARY’S LEGACY: 1952-1953

  7. THE DUCHESS AND THE COUNTESS: 1960-1968

  8. THE BURIAL OF BAD NEWS: 1969-1971

  9. THE WINDSORS AND THEIR WEALTH: 1972-1986

  10. DIANA'S ESTATE OF WAR: 1996-1998

  11. MARGARET, MUSTIQUE AND MONEY: 2002

  12. FROM QUEEN MOTHER TO DAUGHTER: 2002

  13. A ROYAL CAR BOOT SALE: 2006

  14. THE PRINCESS'S "LOVE CHILD": 2006-2008

  15. THE STORMING OF THE PALACE: 2008

  16. THE BEST-LAID PLANS OF ALICE AND MEN: 2008-2009

  17. CHARLES’S CASH COW: 2010

  18. SOVEREIGN GRANT OR SOVEREIGN GREED? 2011-2013

  19. THE DUKE’S FAREWELL: 2014

  20. A NATION MOURNS: 2022

  ACKNOWLEDGEMENTS

  ARCHIVAL SOURCES

  NOTES

  PROLOGUE

  “This is yet another example of him [Prince Charles] setting out his stall for his future inheritance”

  Royal historian Brian Hoey on the palace’s new media operation1

  It was a symbol of the changing of the guard. When on 6 June 2014 the Queen joined President Obama and twenty other world leaders on Normandy’s Sword Beach to commemorate the seventieth anniversary of the D-Day landings, seated immediately behind her on the stage was not just her customary escort the Duke of Edinburgh but also her heir apparent the Prince of Wales. Having already received the same formal reception accorded to the heads of state, Prince Charles was there to shoulder some of the heavy workload for the eighty-eight-year-old sovereign and the ninety-two-year-old consort on their state visit to France which included a punishing schedule of engagements in Bayeux, Ouistreham and Paris crowned by a state banquet at the Élysée Palace with President Hollande.

  The presence of the heir apparent could be viewed as the most high profile sign of Charles’s gradual succession to the throne. Dressed in the gold-braided black uniform of an admiral of the fleet, complete with a set of naval medals glinting in the afternoon sun, he looked suitably magisterial next to the Queen in her lime-green coat, matching hat and diamond brooch. From now on, Her Majesty would be subcontracting some of her official engagements and doing fewer foreign visits – particularly to long-haul destinations. Earlier in April she had kept her appointment in Rome with Pope Francis but tellingly it was an away-day with no overnight stay, after being rescheduled due to ill health.

  In public the palace dismissed any talk of a winding down, let alone a co-regency. Her Majesty was “as busy as she has ever been,” at least on the domestic front.2 At her coronation in 1953 she had vowed to serve her country for her whole life and having as a young girl lived through the trauma of the 1936 abdication crisis, there was certainly no possibility of her taking a lead from the seventy-six-year-old King Juan Carlos of Spain who in the week of the D-Day commemorations suddenly announced his wish to step down in favour of his son, Crown Prince Felipe. The “A” word was not part of the Queen’s English.

  But in private royal aides admitted to “a gradual lessening of the burden,” “a gentle glide” or “passing of the baton” - a handover strategy where official duties would slowly pass to the younger generation. Less deferential Windsor watchers dubbed it “a royal job-share.”3

  During the three-day state visit to France, it was notable that Prince Charles was assigned as many official engagements as the Queen. On day one, while his mother was being entertained by President Hollande in Paris, he lay a wreath at the Glider Pilot Memorial in Normandy, visited the 70th Power Boat Squadron active in the D-Day landings, lunched with British veterans, witnessed a commemorative parachute drop by representatives of the allied forces and attended a memorial service for the parachute regiments. Day two saw him taking part in a British Legion service of remembrance in Bayeux Cathedral, joining the Queen and Prince Philip at another service at the nearby Commonwealth War Graves Cemetery and then going on to the Juno Beach Centre for a third service honouring Canada’s contribution to the greatest amphibious landing in history. Clearly he had been tasked to do the bulk of the heavy lifting.

  In truth, the transition process had been going on well before Prince Charles set foot on the Normandy sands. As early as January 2014 had come the major announcement that the press offices of the Queen and the Prince of Wales would merge, ending a media divide that had existed for over twenty years with the sniping particularly vocal at the height of the Diana divorce. With the press office of Prince Harry and the Duke and Duchess of Cambridge also moving to Buckingham Palace, the House of Windsor could now speak with one single voice.

  The prince’s ten-strong team of PR and media advisors who had been so adept at buffing up his tarnished image before and after the marriage to Camilla would have to move to Buckingham Palace, but crucially the captain of the new ship of spin would be a Charles loyalist, his fifty-four-year-old Director of Communications, Sally Osman, who had earned her stripes running the BBC’s media operation. Formally she would report to the Queen’s Private Secretary, Sir Christopher Geidt, but her salary would be paid, initially at least, by Charles out of his Duchy of Cornwall income.

  Little by little without any royal fanfare, the Prince of Wales had begun over the previous year to take on more duties traditionally associated with the head of state. In May 2013 he sat at the Queen’s right as she opened parliament and later in December he stood in for her at the funeral of Nelson Mandela in South Africa where all the globe’s heads of state and government gathered in one informal international summit. But the most significant event came a few weeks earlier in mid-November when he opened the Commonwealth Heads of Government Meeting in Sri Lanka. It was both the first time his mother had missed the conference since 1971 and the first time he had represented her as Head of the Commonwealth. Given that Charles was not as popular with some Commonwealth leaders as the Queen on account of their religious objections to his divorce, it was important he made a good impression, particularly since the title of Head of the Commonwealth is conferred by the member nations and not automatically by hereditary right.

  With Charles now shouldering some of the Queen’s constitutional responsibilities, he would have to do less campaigning. The prince holds strong views on everything from genetically modified foods and homeopathic medicine to modern architecture and climate change. As sovereign or even stand-in sovereign, he could never snub the Chinese head of state in the way he did when he boycotted an embassy banquet for President Zemin in October 1999 to indicate his distaste for China’s actions in Tibet.4 The media storm that was triggered in May 2014 by one unguarded remark to a Holocaust survivor likening President Putin’s actions in Crimea to Adolf Hitler’s attack on Poland only served to underline the need for a shadow king to keep as mum as his
mother on matters of public policy.

  But the unprecedented feature of this handover was that with the octogenarian Queen having not just children but also grandchildren and even a great-grandchild there were several generations of royals alive at the same time. This meant that Charles could pass over some of his work to his offspring and it was noticeable that Prince William was assigned a part in the D-Day commemorations: accompanied by the Duchess of Cambridge, he attended a veterans tea party in Arromanches before giving a speech and presiding over an evening parade of ex-servicemen through the streets of the town.

  There had already been signs that the Prince of Wales’s eldest son was prepared to champion a few of his favourite causes. In February 2014 the Duke of Cambridge flanked by Prince Charles and Prince Harry took the lead at a Conference on the Illegal Wildlife Trade, calling on the world to turn its back on elephant poaching and suggesting that he wanted all the ivory in the Royal Collection at Buckingham Palace to be destroyed.5 He also helped to lighten his father’s workload by taking a college course in agricultural management in preparation for running the Prince of Wales’s landed estate, the Duchy of Cornwell. This followed his individual tuition in constitutional affairs from his special advisor and éminence grise, the former ambassador to Washington Sir David Manning.6

  Manning accompanied the prince on his subsequent tour of Australia and New Zealand in April 2014 which attracted unprecedented media coverage from all round the world – aided no doubt by the first overseas appearance of baby George and the willingness of his photogenic mother to perform for the cameras. But even the more jaundiced members of the press pack had to concede that it was one of the most successful royal tours in living memory. Many palace-watchers now regarded “William and Kate” as the royal family’s greatest asset.

  William had more time to take on these extra responsibilities because in September 2013 after eight years of military service he left his job as a RAF search and rescue helicopter pilot. It was no coincidence that shortly afterwards Prince Harry also hung up his helmet as a helicopter pilot in Afghanistan to take a desk job with the army. He is normally based close to Buckingham Palace’s media operation at Horse Guards Parade where he organises commemorative events for the military. Now that he is pursuing a more prominent role in public life (including organizing Trooping the Colour, standing in for the Queen at the 2014 memorial service for Nelson Mandela and going on tours of Brazil and Chile) he has taken the precaution of protecting his image. During the handover process, it was revealed that much like celebrities such as David and Victoria Beckham he had founded a company to safeguard his brand and intellectual property rights. With his private secretary Jamie Lowther-Pinkerton as its director, the firm was called Tsessebe - the name of an African antelope. A palace spokesman explained that "it is a pre-emptive move to give them a vehicle for intellectual property, if they needed to trademark anything in the future, but there are currently no plans to use them."7 Around the same time the Duke and Duchess of Cambridge set up similar “brand” companies, William’s APL Anglesey, and Kate’s CE Strathearn.

  Having now delivered an heir to the throne, the Duchess of Cambridge was also being groomed to take on a bigger role. In another gesture heavy with symbolism, in January 2014 the Queen offered Kate the services of her personal dresser and jewellery advisor, Angela Kelly, to help her prepare for the tour of Australia and New Zealand, her most high profile foreign engagement to date and one that mirrored Princess Diana’s much garlanded trip in 1983. The move was seen as a way of giving her a royal make-over, changing her middle class image from High Street to Highness. The palace would never admit it of course but she was to be made more regal. It was reported that Her Majesty would lend Kate jewellery from the fabulous Delhi Durbar Parure – a suite of gems given to Queen Mary at her Indian coronation in 1911 which was then handed down the generations to the Queen and in part to Diana as well, although many royal jewels were later returned to the sovereign as part of the divorce settlement.8

  Putting the Queen’s priceless collection of jewellery under the eyeglass brings into focus one little discussed aspect of the succession process. While all the headlines concentrated on the handover of constitutional and ceremonial duties, an arguably more important transition slipped under the radar - the transfer of the Windsor wealth. The Queen alone has an extensive portfolio of land, art works and financial investments rumoured to be worth hundreds of millions of pounds. Wouldn’t any succession planning involve estate planning too?

  It is inconceivable that a sovereign in her ninth decade would not have undertaken the most meticulous planning to safeguard her financial legacy. The best professional advice would have been near at hand. At their elegant offices overlooking Lincoln’s Inn Fields the royal family’s long-standing lawyers Farrer and Co have a legion of tax consultants and other experts offering guidance on “wealth preservation.” The Queen’s private solicitor, Sir Mark Bridges, boasts on his web page that “he specialises in tax, trusts and succession issues for clients from all over the world, including some of the world's wealthiest families.”

  Within her own family the Queen would have witnessed how much time and effort goes into inheritance planning. Her grandmother Queen Mary who was famous for being, in Churchill’s words, “practical in all things” spent the last two months of her life cataloguing her priceless jewellery collection so that family heirlooms could be separated from Crown property. Her sister Princess Margaret who was known to intimates as a great planner went one step further by transferring to her son a full decade before she died her most cherished possession – her holiday home on Mustique.

  This all goes to show that the House of Windsor dislikes leaving things to chance. Planning is part of the wiring of Buckingham Palace. Courtiers are rewarded for foreseeing potential fire hazards and preventing any sparks from flying. Sir Christopher Geidt – the palace official credited with masterminding the recent handover - was given a second knighthood for his work on what the formal citation called “a new approach to constitutional matters. . . [and] the preparation for the transition to a change of reign.”9

  The discretion of courtiers is not the only reason why the process of wealth transfer has received little publicity. The royal family benefits from a number of privileges that help to keep their financial affairs away from prying eyes. By statute the sovereign’s will is sealed and it is customary for the wills of other royals to be closed to the public and probate details kept under wraps. Over the last century, any embarrassing documentation relating to money and other matters has regularly been destroyed by staff and family members. Senior royals are now exempted from Freedom of Information requests and no comprehensive catalogue of their private jewellery collection is available to the public.

  As a result, tracing the inherited wealth of the royal family can at times feel like tracking a pod of whales swimming deep below the ocean waves. You know that that these behemoths are lurking there somewhere under the surface but pinpointing their exact location is a task that would try the patience of Captain Ahab. Sometimes a tell-tale water spout is sighted on the far horizon (say, in the form of a public auction of royal property), but only a small proportion of their true size is revealed before they disappear again leaving a tantalising trail of foam in their wake. At other times one of their number is found lifeless beached on the shore (as in the case of a sudden royal death and the public grant of probate) but you are not permitted to get too close to inspect the entrails for fear of causing damage. Both whales and Windsors enjoy the protection reserved for an endangered species.

  My fishing expedition began one spring morning in the unlikely setting of the London probate registry on High Holborn. By chance I hooked two royal wills that the staff initially believed off-limits to the public - the last testaments of Princess Helena Victoria (Queen Victoria’s granddaughter) and Princess Alice (the Queen’s aunt). Their discovery set me off on the trail of other royal estates over the last century - from Edward VII’s t
o the Queen Mother’s - with the hope of dredging up hidden treasures.

  Of course there is a world of difference between the probate value of an estate and the true wealth of the deceased. More often than not the former is just the tip of the iceberg. But that small icy ledge serves as a useful jumping off point to plunge deeper into the greater wealth hidden beneath the official figures. If you know, say, that Queen Mary left an estate of under half a million pounds yet possessed the most valuable collection of jewellery of any queen of England, then you are bound to delve further and wonder where are the missing millions.

  For any sleuth on the trail of royal wealth, probate value is the dog that did not bark in the night. More useful clues to the true worth of the Windsors’ assets are often found in auction records from the sale of their property which not only put a price tag on valuables that are rarely valued but also give details of ownership and how the property has been passed down through the family. In the case of this story, the auction records of the property of Princess Margaret, the Duchess of Gloucester and the Duke of Kent have proved essential in unwinding the chain of inheritance. Court records from the legal action of a Jersey accountant claiming to be Princess Margaret’s illegitimate child and the trial of Princess Diana’s butler have also produced a wealth of new information about how the Windsors conceal their wealth. Land registry documents can also be revelatory by showing, as in the case of the Gloucesters, how royal property can be safeguarded well before death by being transferred into a trust.

  You don’t have to be a dyed-in-the-wool republican to be naturally curious about how members of the royal family manage their money. One can be nosy without being nasty. Indeed, asking one prying question about the Windsors’ riches can set off an inheritance chain reaction. Where did their private wealth come from in the first place? Was it made, inherited, acquired through marriage or amassed through tax privileges and state subsidy? How much of it came from gift-giving and where do you draw the line between a private and an official gift? How much of it has been saved and how much spent? How is it retained and not salami-sliced by multiple deaths or marrying out? And how is it kept away from the scrutiny of parliament and the general public? Whatever could they be hiding?