THE PAVEMENTS at the junction of Pall Mall and St James’s Street in London, blocked off by hoardings, are a nightmare for pedestrians while new pavements, utilities and traffic crossings are laid.
The barriers trumpet the usual lists of contractors’ names, some of them Irish, along with those paying for the work, including Westminster City Council and the crown estate, a much lesser-known body.
The crown estate manages more than £6 billion worth of properties from St James’s Street to Ascot Racecourse, 150,000 hectares of farmland, dozens of forests and shopping centres, along with the foreshore around the United Kingdom.
Facing debts in the 1760s that had spiralled to more than £3 million, George III, who later went mad, handed over the estate to parliament in return for a civil list payment, one that was increased in subsequent years. Despite his impecunious circumstances, he won a good deal.
Besides handing over an entitlement to excise duties and post office revenues, he ceded control over lands generating £11,000 in annual rent, worth less than £2 million today, in return for a civil list payment worth £800,000-a-year, or more than £110 million today.
Today, the Queen gets £7.9 million under the civil list from the treasury to act as head of state, a sum that has remained unchanged for a decade. Some £22 million more is given to cover the cost of buildings. In all, the royals cost just under £40 million a year.
Spending, driven by Whitehall cuts, is to fall by 14 per cent in two years’ time, before the entire system is replaced with the creation by the chancellor of the exchequer, George Osborne, of the sovereign support grant based on a share of profits from the crown estate.
The royal family is hardly broke, though a perennial argument exists about the value of the Queen’s personal wealth – with some putting the figure above £300 million and others saying much of it is state-owned in all but name.
Some argue, however, that the chancellor, despite saying the cutbacks facing the monarchy is evidence “we are all in it together”, is readying to give Buckingham Palace the deal of a lifetime. The palace favours the change, arguing it will make administration more efficient since it will be able to decide its own spending needs, rather than sticking to the allocations laid down by the treasury.
Already enjoying £17 million a year from the Duchy of Cornwall, Prince Charles has long pressed for the royals to be funded from a percentage of the crown estate, rather than facing interminable negotiations with government.
Negotiations are under way about the share, but 15 per cent is mooted.
“The Bill is still being drafted and negotiations are ongoing to get a settlement that is acceptable to both parties. Of course everyone, including the Queen, is aware of the straitened times that we live in,” said a royal source.
For now, republican sentiment is relatively muted in the wake of the success of the wedding of Prince William and Catherine Middleton, which generated priceless international press coverage of all things British.
However, more than a few MPs are suspicious. Two years ago, the House of Commons raised questions about what had happened to money raised from visitors’ fees to Buckingham Palace that should have paid for the restoration of Windsor Castle, damaged by fire in 1991.
Instead, the money had found its way – by a route described as “bizarre” by a Welsh Labour MP – into the Royal Collection, Queen’s Elizabeth’s charity that looks after all of the artworks on display in the royal palaces.
The sovereign grant could be a magnificent deal for the royals, since the crown estate, which handed over £220 million last year to the treasury, had an income of £320 million – including more than £240 million from property rents and service charges alone.
The valuation on the estate, which includes lands first given – or seized – by the crown in the days of William the Conqueror and which is run now by 400 administrators, plummeted during the financial crisis by nearly £500 million, though the figures are rising again.
Profits are expected to rise further to £450 million a year over the next eight years, partly on the back of increased revenues from the redevelopment of some of its flagship properties on St James’s Street and the prime shopping ground of Regent’s Street.
However, the mother lode could be at sea. The crown estate owns the rights to the seabed for 12 miles out around the shores of Britain – which means offshore wind farms must each pay a levy.
Today, there are some 450 turbines around the UK coast. Backed by nearly £200 billion worth of spending on power generation in the coming decade, the number is expected to rise to 6,000 within a decade.
Such rents would have pleased even William the Conqueror.
