MP Norman Baker examines the Royal family's finances

Where did Princess Margaret get £20m and how about the Queen mother’s £70m legacy? In his controversial new book, MP Norman Baker examines the family’s finances as he accuses the Windsors of Right Royal Robbery

  • Mr Baker, an MP for 18 years, describes a divide between Royal Family and public
  • Writes of a scheme to offload costs of Maundy Thursday the Monarch hands out 
  • He also describes culture of accepting freebies and ‘exploiting’ the Royal name 
  • And claims they can be somewhat Scrooge-like with gifts to their staff members
  • New book And What Do You Do? What The Royal Family Don’t Want You To Know

The British Royal Family is the original Coronation Street – a long-running soap opera with the occasional real coronation thrown in. Its members have become celebrities, like upmarket film stars, attracting often fawning coverage.

So it’s easy to feel that we know the Windsors and that, in some ways, they are just like us. Yet the truth is that the disconnect between the Royals and the public is vast, not least in terms of the extraordinary fortunes they have quietly amassed for themselves.

Some Royal wealth is conspicuous. Take Balmoral Castle and Sandringham House, for example: both were bought with public funds and qualify for taxpayer support when they are used for official business. They remain the Queen’s private property, all the same.

Less obvious are the breathtaking tax breaks, the lavish state subsidies and an all-encompassing secrecy that hides the Windsors’ gluttonous excesses.

 Regular attempts to nail down the private wealth of the Queen (left at the state opening of Parliament in 2009) and her family (her son Charles is pictured right at Sandhurst in 2015) are rebuffed by courtiers who argue that these are private matters. In 2001 the Daily Mail calculated that the Queen was worth £1.15 billion, excluding those items held in trust for the nation by the Crown, with her investment portfolio valued at £500 million

Queen Elizabeth II and Prince Charles, Prince of Wales, during the 2019 Braemar Highland Games at The Princess Royal and Duke of Fife Memorial Park last month in Braemar, Scotland

Along with parlour games and practical jokes, it seems there are few things they enjoy more behind closed doors than looking after the pennies, certain in the knowledge that they will rapidly turn into pounds, and many millions of them.

As a former MP and current member of the Privy Council, I thought I knew a good deal about the inner workings of the Royal Family, but even I have been shocked by what I have discovered in the course of researching my new book.

The reality is best summed up by Prince Charles himself, when he said: ‘I think it of absolute importance that the monarch should have a degree of financial independence from the State… I am not prepared to take on the position of sovereign of this country on any other basis.’

Which is to say that the State should provide him with copious amounts of public money, free from taxation – or other irritations such as accountability.

We as citizens should worry that our future king has subscribed to a view familiar to autocrats down the ages, one more in line with the practices of his ancestor Henry VIII than a modern democracy.

Guess who pays for coins the Queen gives away? 

There is even a scheme to offload most of the costs of the Maundy money the Queen hands out every year.

This ceremony, held on the day before Good Friday, is inspired by the actions of Jesus in washing the feet of the poor. By the 18th Century, British monarchs had decided that handing out specially minted coins was preferable to washing feet.

Examples of the Royal Maundy money that was handed money to pensioners from all over Britain to mark the Queen’s Diamond Jubilee

The Royal Household pays face value for the coins that the Queen distributes, which, given that the coins in question are pennies is hardly going to break the bank. The taxpayer, however, pays for the full cost of the specialist minting, which will not be cheap. Talk about a good deal.

In 2002, I asked the Treasury for the cost of manufacturing the coins, but was unconvincingly told that this was commercially sensitive.

Just how much money have the Windsors accumulated? Regular attempts to nail down the private wealth of the Queen and her family are rebuffed by courtiers who argue that these are private matters. I take a different view: if their wealth has in part been created by unique tax breaks to the disadvantage of the public purse, or from simple exploitation of public money, then the Windsor millions are very much a public concern.

In 2001 this newspaper calculated that the Queen was worth £1.15 billion, excluding those items held in trust for the nation by the Crown, with her investment portfolio valued at £500 million. Her stamp collection alone was put at £100 million. It is a safe bet to assume her wealth has increased substantially since then. Exact figures are hard to come by, however, and no wonder: the Royal Family likes it like that. The highly unusual way they treat legacies is a good example. Wills are public documents, as everyone knows. Indeed, they have always been open for inspection in this country as an essential safeguard to prevent theft and malpractice.

Ever since 1911, however, the Royals have been allowed to ‘seal’ selected wills – or declare them private – in the interests of upholding the dignity of the Crown.

The catalyst was the death of Prince Francis, brother of George V’s wife Queen Mary, in 1910. Prince Francis’s will had scandalously left prized family jewels to his mistress, the Countess of Kilmorey, with whom he was rumoured to have had a child. The Royal Family responded in characteristic fashion: they hushed it up.

Queen Mary persuaded a judge to ban public access to the will and the countess was paid £10,000 – around £700,000 today – to return the jewels. A precedent was set and today, Royal wills are locked up in a metal safe behind an iron cage in Somerset House.

The power to seal wills is certainly useful for those wishing to avoid awkward questions.

In May 2002, I asked the then Prime Minister Tony Blair to publish the Queen Mother’s will after her death earlier that year. He refused, referring to ‘the longstanding convention’ that Royal wills are private.

NORMAN BAKER: In May 2002, I asked the then Prime Minister Tony Blair (pictured earlier this month) to publish the Queen Mother’s will after her death earlier that year. He refused, referring to ‘the longstanding convention’ that Royal wills are private

The will of the Queen’s sister, Princess Margaret, who also died in 2002, was similarly ruled out of bounds. Why, we might wonder? Is the Royal Family pathologically wedded to secrecy or would it have been embarrassing to reveal just how much money was sloshing around?

Although the details of Margaret’s will remain inaccessible to this day, it was eventually estimated that the Queen’s sister had left an estate of some £7.6 million – having previously disposed of £12 million of assets to her family, including her house on the Caribbean island of Mustique, to minimise death duties. Where did the heavy-spending Princess get £20 million? The Royal Family is not inclined to tell us.

A dizzying array of freebies… that can all be kept secret 

The Committee on Standards in Public Life has set out a series of tests for those holding a public position.

MPs rightly have a tight code of conduct when it comes to accepting gifts, for example, and Ministers a yet more onerous one.

But the Royal Family seems to have exempted itself.

There is a culture of accepting freebies and exploiting the Royal name for personal gain, which clearly violates the requirements of some of the tests applied to others in public office.

Instead of acting with financial integrity, there are some in the family who seem to use their status as a way of enriching themselves.

Royal supporters will argue that the Windsors receive this largesse in a private capacity.

But individuals employed in public roles elsewhere are required to declare private activities where this might affect their public roles.

Councillors, for instance, have to withdraw from discussions on planning matters if the application being considered may affect their private position.

Members of Parliament are required to register any income from whatever source above a low threshold, whether or not it has any obvious connection with their parliamentary activities.

But the Royal Family can accept any free holiday, free use of a castle, the use of a private jet, a luxury car or designer clothes… all without any requirement even to record these gifts (although official gifts are recorded).

In my view, as a basic step, each member of the Royal Family should be required to register anything worth in excess of £150 unless it is genuinely from close friends or family.

They should also be required to register gifts in kind with a value greater than the £150 limit, where there is a public aspect to this, such as clothes lent to be worn on official engagements.

We have a right to know who is buying favour with those who comprise one leg of our constitutional structure, namely the monarchy, and they should have a duty to make that information public, just as others in public office have to.

If Margaret’s fortune raises eyebrows, the Queen Mother’s reputed £70 million legacy raises serious questions. Take the case of the valuable jewellery that she had supposedly given to her grandchildren back in 1993. This was more than seven years before she passed away, which meant that no death duties were payable.

All these items were found in one of her cupboards after her death, which might be construed as deception, yet the Inland Revenue decided to let it go. So where did the Queen Mother’s £70 million come from? Perhaps part of the answer to the mystery can be found in a 1942 windfall, when she was left a large hoard of jewels by an heiress to the McEwan brewing fortune, a collection known as the Greville inheritance. Was this hoard given to her personally or as consort to George VI? Did the jewels truly belong to her, or to the State? And why were no death duties paid on the £70 million? It could be, of course, that there is nothing untoward in these wills. If so, why seal them?

The Windsors have almost complete exemption from the Freedom of Information Act, too, and special protection from the National Archives at Kew.

The National Archives are releasing ever more of our historical documents as the years go by, and from earlier and earlier. But some stay locked up beyond 30 years and it is no surprise that the biggest proportion of these relate to Royal matters. When I visited Kew, I found there were 3,629 closed files on the Royal Family.

There was no fooling the Royal Family on April Fools’ Day in 2012. Far from it. Because this was the day the Sovereign Grant Act came into force, sweeping away the long-established Civil List and replacing it with a remarkably generous new source of public funding.

The figures speak for themselves. Between 2001 and 2010, the old Civil List had been set at £7.9 million annually. In 2011, it grew to £13.7 million.

But then, in 2012, the first year of the Sovereign Grant, financial support to the Royals more than doubled to £31 million, and this was just the start of a cash bonanza.

In the most recent financial year, 2018-2019, the Sovereign Grant payout to the Royal Family reached a staggering £82.8 million.

This method of paying for our monarch and her family was not merely novel, it overturned more than 250 years of a settled scheme.

In 1760, on ascending the throne, George III did a deal with the government: he would surrender land across Britain to the nation in return for money from the government to support him and his lifestyle.

As part of the deal the government would take over responsibility for funding the Armed Forces, the secret service, the judiciary and other public functions.

NORMAN BAKER: Although the details of Margaret’s will remain inaccessible to this day, it was eventually estimated that the Queen’s sister had left an estate of some £7.6 million – having previously disposed of £12 million of assets to her family, including her house on the Caribbean island of Mustique, to minimise death duties (Princess Margaret is pictured)

NORMAN BAKER: If Margaret’s fortune raises eyebrows, the Queen Mother’s reputed £70 million legacy raises serious questions (the Queen mother is pictured) 

Over the years, however, some Royals – especially Prince Charles – have looked with envy at the performance of this land and property, which is today known as the Crown Estates. They have seen it prosper and have started to regret George III’s arrangement. If only the clock could be turned back…

Successive governments of all colours resisted this suggestion until, that is, George Osborne became Chancellor and agreed that the Civil List should be replaced by a scheme whereby a percentage of the profits of the Crown Estates went to the Royals.

Still raking it in from Windsor fire scheme 

Windsor Castle required major restoration after the fire in 1992 and it was agreed that, to fund it, Buckingham Palace would open its doors to tourists for a few weeks every year.

It was a neat solution that avoided spending public money and allowed a peek inside the Palace for those who wanted to pay for the privilege.

Windsor Castle required major restoration after the fire in 1992 (pictured)

And it was successful. In the five years from 1993, £25.9 million had already been raised towards a total repair bill for Windsor Castle of £36 million. But hang on – more than 20 years later, in 2019, the doors of Buckingham Palace are still open and money is still flowing in. The restoration of Windsor was paid for long ago, so what is happening to the money now?

It transpires that it was diverted to pay for the restoration of art works in the Royal Collection. A worthwhile cause, maybe, but the public might have expected this money instead to be used to keep down Royal calls upon the national purse.

After all, it is public money that is footing the entire bill for a no-expense-spared £359 million revamp of the Palace (a scheme waved through the Commons by a small group of MPs who took just 13 minutes to approve the plan in 2016.)

This was initially set at 15 per cent, but has subsequently been upped to a munificent 25 per cent.

For the icing on the cake, a hugely beneficial condition was inserted. If in the unlikely event the Crown Estates’ income fell one year, the Royals would continue to be paid the same money as the previous year. Which is to say that their cut would never actually go down.

The abolition of the Civil List has proved hugely profitable for the Royals.

In July this year – to take just one example – the Crown Estates, which holds the rights to the seabeds across Britain, announced an auction for the biggest offshore windpower development in the world.

This will provide a bumper windfall of hundreds of millions for the Queen, a vast sum that, before George Osborne’s disastrous intervention, would have gone back to the Treasury.

It is not as if the Royals are cheap to run. They demand expensive security, for a start, even for minor Royals who most people have barely heard of. Then there are the official properties – way in excess of what is needed to sustain a constitutional monarchy.

The State supports not just Buckingham Palace but also St James’s Palace, Clarence House, Marlborough House Mews, Kensington Palace, Windsor Castle, Frogmore House and Hampton Court Mews, to name but a few.

In total, the taxpayer pays for more than 100 Royal buildings.

Meanwhile, the public purse funds the whole sprawling network of 99 Lords Lieutenant (not to mention hundreds more deputies) who act as the Queen’s representatives.

Of course, if Charles really wants to recreate the position before 1760, that would require the monarch once again to personally fund not only the expenses of the Royal Family but also the salaries and pensions of Ministers, judges and civil servants, and the costs of the Armed Forces and secret services, too.

It was to lose that heavy burden that George III agreed to a new arrangement. But the current heir would appear to be interested only in the beneficial side of the equation that would enrich the Royals, not the one that would entail liabilities.

The Duchy of Cornwall and its companion piece, the Duchy of Lancaster, were not surrendered as part of the 1760 deal entered into between George III and Parliament as they were regarded as insignificant at the time.

The State supports not just Buckingham Palace (pictured) but also St James’s Palace, Clarence House, Marlborough House Mews, Kensington Palace, Windsor Castle, Frogmore House and Hampton Court Mews, to name but a few

In total, the taxpayer pays for more than 100 Royal buildings (pictured, one of those funded by the state – St James’s Palace in London)

These two vast estates are still effectively controlled by the Royal Family – and today they are hugely profitable.

The first of these, the Duchy of Lancaster, comprises well over 40,000 acres, including highly valuable swathes of land such as the Savoy Estate off the Strand in London, ten castles and land in several counties across England.

Money derived from the Duchy goes straight to the monarch, as it has done for well over 500 years.

Not shy to claim EU handouts 

Like any large landowner, the Royals have benefited hugely from the operation of the Common Agricultural Policy, the rules of which reward the mere possession of land. 

An analysis by Greenpeace in 2016 revealed that the Queen was one of the top recipients of EU money, with her Sandringham farmland alone coining in £557,707 that year, with a similar sum every year. 

On top of that, the Royals have been keen to look for other public money sources they can tap into, including applying to the Forestry Commission for a grant of £300,000 for fencing work. 

The Duchy of Cornwall, which dates from 1337, owns a third of Dartmoor National Park, about 160 miles of coastline, lots of rivers and riverbeds, and residential and commercial properties galore.

This includes highly valuable London sites such as the Oval cricket ground in South London. Its profits go to the Prince of Wales, as do many ancient privileges.

Prince Charles has the right to scavenge shipwrecks and to catch Royal fish, including whales, porpoise, grampuses and sturgeon.

He has the right to wine from every ship that lands in Cornwall and the seizure and confiscation of enemy ships in times of war.

As recently as 1973, Charles received his feudal dues of a hundred silver shillings and a pound of peppercorn from the Mayor of Launceston.

From the village of Stoke Climsland, the Duke – which is to say Charles – received a daily bounty of a salmon spear (an instrument used to catch the fish) and a bundle of firewood while he was in residence locally, a bow made of alder from Truro, a pair of white gloves from the village of Trevalga and a pair of greyhounds from the manor of Elerky in Veryan. A cottager near Constantine baked a lamprey pie with raisins in lieu of rent.

Some of these ancient privileges have very modern advantages. Under the right to create mines, for example, the Duchy registered in 2012 extraction rights for tungsten and iridium, a rare and valuable metal used in modern technology.

The right to foreshore gives a nice steady income from tourists parking on some Cornish beaches, or from surf schools that have been established. There are other advantages, too. The Crown was given exemption from the 1967 Leasehold Reform Act, which was then also claimed by the ‘private estate’ that is the Duchy of Cornwall. That means that tenants of the Duchy do not have the automatic right – unlike just about everybody else – to buy their property outright or secure a lease extension.

Prince Charles (pictured) has the right to scavenge shipwrecks and to catch Royal fish, including whales, porpoise, grampuses and sturgeon

And when a company located in either the Duchy of Cornwall or Lancaster is dissolved, its assets are transferred not to the Treasury, as would be normal, but directly to the Queen or Prince Charles.

Most significant of all, however, is the cold hard cash. Prince Charles receives more than £21 million annually from the Duchy of Cornwall, which has net assets of more than £1 billion. The value of the Duchy of Lancaster, too, has ballooned and its holdings are now worth £533.8 million. Profits have grown from £12.9 million in 2012 to just over £20 million in 2018.

It is true that members of the Queen’s family, who used to receive money direct from the Civil List, now get their handouts from the Duchy of Lancaster’s income. But in every Royal cloud there is a silver lining.

The Queen claims these payments as a deductible expense, even though the rest of her family play no role in the Duchy. The result is to reduce significantly the tax bill she (voluntarily) pays.

But Scrooge-like with their staff 

Nicholas Haslam, the interior designer and a friend of the Windsors, once said: ‘The Royals love to play at being poor… They turn each other on with their stinginess.’ 

At Christmas, some staff at Buckingham Palace are rewarded for their loyalty with gifts such as jam from the Palace shop. Recipients are advised to check the sell-by dates. 

The Queen gets a discount on items that are not selling well, or are close to the end of their shelf life.

The staff who fought hard for hours to save valuable artworks and artefacts from the devastating fire at Windsor Castle in 1992 were offered nothing more substantial by way of thanks than a free tour. Most declined.

Although it is termed a ‘private estate’, the Duchy escapes paying any corporation tax, an example of the Royals alternating between private and public status according to what benefits them in any given circumstance.

Given that the Duchy of Lancaster has its own government Minister, it seems clear to me that it is, in fact, a public asset, not a private one, and the profits it generates should go not to the monarch but straight into the public purse. For the monarch to keep them is Royal robbery.

If, on the other hand, it is argued that it is indeed genuinely private, then it should be subject to the same rules as any other private estate, notably in terms of taxation. The Royal Family should not have it both ways, but the problem is it seems they can and do.

Another giant wheeze is the exemption from inheritance tax for bequests from a king or queen to the heir who succeeds them.

For example, the Treasury is estimated to have lost out to the tune of between £20 million to £25 million on the death of the Queen Mother in March 2002. Tax-free gifts to her daughter included a priceless Fabergé egg collection, her string of racehorses and a valuable collection of paintings. Naturally, whatever is held in trust by the monarch but which belongs to the nation is exempted from death duties, and rightly so. This would include buildings such as Buckingham Palace and treasures such as the Crown Jewels and the Royal Collection. But why should inheritance tax not be applied to a monarch’s personal property, just as it is for every other person in the country? Why has it never been applied to private Royal possessions such as Balmoral and Sandringham?

There are those who believe that much of the Queen’s so-called private estate should be returned to the nation anyway.

Sandringham, Balmoral and the Osborne estate on the Isle of Wight were purchased by Queen Victoria from monies given to her by Parliament through the Civil List.

As a result of Albert’s regular pleadings of poverty they were given more than they needed to enable Victoria to carry out her constitutional duties, but then hung on to the cash and invested it in property.

Earlier this century, the public was rightly horrified when the grisly details of the abuse of expenses by MPs were uncovered.

Here were people in high office taking public money designed to support them in their job as elected representatives, and instead using it to provide duck houses, clear ivy off buildings, clean moats, buy luxurious furniture and the rest.

For the Royals to use Civil List money to buy and help amass a private property portfolio is no different: it is fiddling their expenses.

© Norman Baker, 2019

Abridged extract from … And What Do You Do? What The Royal Family Don’t Want You To Know, by Norman Baker, published by Biteback on Tuesday, priced £20. Offer price £16 (20 per cent discount) until November 12, 2019. To order, call 01603 648155 or go to FREE delivery on all orders – no minimum spend.


The Queen and Prince Charles could make more than £100 million a year from the huge expansion of offshore windfarms – thanks to a change in the way that the monarchy is funded.

The green energy earnings of the Royal Family are being significantly boosted by an auction, which formally began last week, for the biggest offshore windpower development in the world.

If they were still being paid by the long-established Civil List, the Royals would not have benefited. However, the then Chancellor George Osborne replaced it in 2012 with the Sovereign Grant.

Crucially, the deal gives the Queen 25 per cent of the profits from the Crown Estate, which owns the seabed within Britain’s territorial waters that extend almost 14 miles from the coast. The Crown Estate charges rent equal to two per cent of revenues for use of its seabeds for windfarms and collected £41 million last year. It will also collect ‘option fees’ each year from successful bidders for the five new highly lucrative concessions.

In a comprehensive examination of Royal finances, former Liberal Democrat Minister and Privy Counsellor Norman Baker describes in a new book how the abolition of the Civil List ‘has proved hugely profitable’ for the Queen.

He said that the windpower development ‘will provide a bumper windfall of hundreds of millions for the Queen, a vast sum that before George Osborne’s disastrous intervention would have gone back to the Treasury’. Serialised today in The Mail on Sunday, Mr Baker’s book also reveals:

  • Questions about how the Queen Mother amassed a £70 million legacy remain unanswered because the law prevents scrutiny of hers and other Royal wills;
  • Princess Margaret disposed of £12 million of assets to her family – including her home on Mustique – to minimise death duties;
  • The National Archive holds 3,629 secret files on the Royal Family;
  • Between 2001 and 2010, the Civil List was set annually at £7.9 million, but under the new system last year’s payout was a staggering £82.8 million;
  • Profits from valuable London sites owned by the Duchy of Cornwall, including the Oval cricket ground, go to the Prince of Wales.

Prince Charles is a vociferous campaigner for renewable energy sources but is opposed to turbines being erected on land – particularly near his own homes. He has described windfarms as a ‘horrendous blot on the landscape’ and has refused to have any built at his Highgrove estate in Gloucestershire or on the Duchy of Cornwall estate. He has, however, expressed enthusiasm for siting them offshore.

The auction of seabed licences is the first for ten years and is expected to be highly competitive as companies seek to develop projects in UK waters, the world’s biggest market for offshore wind.

The Mail on Sunday revealed in 2010 how the boost to Royal finances had quietly slipped through as part of that year’s Comprehensive Spending Review.

In what one source described last night as a ‘masterstroke’ by Prince Charles’s then closest adviser Sir Michael Peat, 250 years of history was overturned by scrapping the arrangement under which taxpayers’ money was been used to fund the Royals and pay for the upkeep of their palaces.

Industry experts believe if the Government’s wind energy target – to source a third of electricity from offshore wind by 2030 – is met, the Queen could collect more than £100 million annually. At present it sources eight per cent from wind. Over the past ten years the Crown Estate has returned a total of £2.8 billion to the Exchequer – including a record £343.5 million last year – which has been invested in public services.

As managers of the seabed around England, Wales and Northern Ireland, the Crown Estate says it ‘works closely with industry and stakeholders to identify sites for sustainable development, awarding seabed rights for offshore renewable energy, as well as cables pipelines and marine aggregates’.

The level of the Sovereign Grant is reviewed every five years with the next review is in 2021. The Civil List financed the monarchy from the time of King George III. Under the new system, the Queen’s finances are subjected to the same detailed audit and examination by MPs as Whitehall departments to ensure that they provide ‘value for money’.

When the new rules were announced, Mr Osborne, who was then Chancellor of the Exchequer, said the Monarch’s budget would rise and fall in line with the wider economy. Ministers can block any excessive rises in the Queen’s income and set aside reserves to protect members of the Royal Family from steep falls in their budget.

Reporting by Ian Gallagher for the Mail on Sunday 

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