WORLD

ELIZABETHAN GRACE

BOWING TO PUBLIC PRESSURE, THE QUEEN AGREES TO PAY INCOME TAX AND SUPPORT HER ROYAL FAMILY

ANDREW PHILLIPS December 7 1992
WORLD

ELIZABETHAN GRACE

BOWING TO PUBLIC PRESSURE, THE QUEEN AGREES TO PAY INCOME TAX AND SUPPORT HER ROYAL FAMILY

ANDREW PHILLIPS December 7 1992

ELIZABETHAN GRACE

WORLD

BOWING TO PUBLIC PRESSURE, THE QUEEN AGREES TO PAY INCOME TAX AND SUPPORT HER ROYAL FAMILY

ANDREW PHILLIPS

Some time next April, officials of Britain’s Inland Revenue will examine one of the most unusual income-tax returns in history. Name: Elizabeth Alexandra Mary Windsor. Occupation: Monarch. The document that follows will detail one of Britain’s best-guarded secrets: the income of Queen Elizabeth II. Only a tiny and select circle of tax officials will see that information, but the announcement last week that the Queen has decided to voluntarily pay income tax was aimed at a much wider audience. Clearly seeking to win back public favor after what she frankly described as a “horrible year” for the Royal Family, the Queen made what amounted to the most dramatic gesture of her 40-year reign.

In financial terms, the decision will make little difference to British taxpayers. Most experts estimate that the Queen will end up paying about $4 million a year in income tax. And her decision to pay the cost of keeping most members of the Royal Family from her own purse will put another $1.9 million into public coffers—a mere drop in the finances of a major nation. But the symbolic effect was enormous. After months of escalating public anger at the scandals surrounding the Royal Family and the Queen’s unique tax-free status, monarchists hailed it as a bold move towards a more accountable, more accessible monarchy. Declared Lord St. John of Fawsley, a former Conservative minister who is one of the Royal Family’s most outspoken public defenders: “It will bridge the gulf that was threatening to grow up between her and her subjects.” Despite last week’s gesture, that remains a difficult task. Polls show that the failed and failing marriages of younger members of the Royal Family have severely dented its popularity in Britain. Just how damaged became painfully apparent as the last flames died away from the Nov. 20 fire that ravaged Windsor Castle,

the Queen’s main residence on the outskirts of London. When Peter Brooke, the British minister responsible for “national heritage,” pledged that the government would pay the entire cost of restoring the castle—a bill that experts said could top $120 million—it unleashed a fire storm of criticism aimed at the monarch.

Through opinion polls, phone-in shows and outraged newspaper editorials, Britain’s recession-strapped public left little doubt that it wanted the Queen to contribute to the cost of restoring the castle. And a poll for Independent Television News found that three-quarters of Britons believed that the cost of the monarchy

should be cut, while only one in five thought that the Royal Family represented good value for the money. Even the strongly monarchist Daily Mail charged: “The impression given is of an out-of-touch government pandering to a wealthy and out-of-favor Royal Family.”

The same day, the Queen made an extraordinary speech at a London luncheon marking her 40 years on the throne. Her voice croaking under a heavy cold, which was aggravated from striding through the rain to inspect the damage at Windsor, she frankly admitted the human failings of members of the Royal Family. Fresh in the memories of her audience was a litany of

crises: the sensational collapse of the marriage of her second son, Andrew, the Duke of York, last spring; embarrassing revelations about the domestic cold war between Prince Charles and the Princess of Wales; and the divorce of Princess Anne. The Queen acknowledged that 1992 “has turned out to be an annus horribilis”—a horrible year. She pleaded for public understanding, asking that criticism of the monarchy be tempered with “a touch of gentleness, good humor and understanding.”

By royal standards, it amounted to a public abasement of the Queen, but the reviews the next day no doubt fell short of her expectations. Critics expressed sympathy, but also called on her to help pay for repairing Windsor Castle and to cut the cost of the monarchy. As the pressure on the Queen intensified, Prime Minister John Major told startled MPs in the House of Commons on Nov. 26 that she had proposed to start paying taxes on her private income when the new tax year begins next April 6, and that she would cover the cost of most members of the Royal Family.

Buckingham Palace officials tried to further defuse public criticism by suggesting that the Queen is not as wealthy as some estimates—

which range as high as $13 billion—have suggested. In fact, many of the monarchy’s trappings, such as Windsor Castle, the Crown Jewels and the royal art collection, are effectively state property. The Queen’s strictly personal wealth is much smaller. It includes her estates at Sandringham in Norfolk and Balmoral Castle in Scotland, a private investment portfolio, and her stable of race horses. After being briefed by Palace officials, British papers reported that the Queen’s investments amount to about $100 million which, they estimated, would generate an annual income of $10 million—yielding an annual tax bill of $4 million.

However, Phillip Hall, author of a detailed study of the monarch’s finances called Royal Fortune, estimated that the Queen’s portfolio of stocks and shares is worth closer to $800 million. It was Hall’s book, published earlier this year, that helped to spark the controversy about the Queen’s tax-free status. He revealed previously secret documents that showed that the monarch’s exemption from paying tax is comparatively recent. Queen Victoria paid income tax starting in 1842. It was King George V who negotiated a partial exemption in 1910, and the Queen’s father, George VI, who won a complete exemption from tax in 1937. The announcement last week, noted Hall, would merely , restore the monarch’s tax situation to what is was during most of the 19th century.

At the same time, the Queen agreed to cover the expenses of most members of the Royal Family. Only the Queen herself, her husband, Prince Philip, and the Queen Mother will receive government money under the $17.2 million-a-year Civil List. The Queen will use her own money to pay for Prince Andrew, Princess Anne, Prince Edward, Princess Margaret and Princess Alice, the Queen’s aunt. The total saving to taxpayers: about $1.9 million a year. Prince Charles will also share the financial pain. Officials said that he “enthusiastically endorsed” the Queen’s decision, and will pay Britain’s top 40-per-cent tax rate on his private income, instead of the voluntary 25 per cent he had been paying. His extra tax bill will amount to an estimated $950,000 a year.

The Queen’s most outspoken critics, not surprisingly, remained unimpressed. Avowed republicans, such as far-left Labour MP Dennis Skinner, called it the start of a process that might eventually end with the abolition of the monarchy itself. “For once the Royal Family seems to be fallible,” said Skinner. “The mystery is gone and, if there’s no mystery, there’s no infallibility. I think they’ve destroyed themselves.”

The Queen’s own verdict on what may well turn out to be the most decisive week of her reign was written all over her face. When she spoke about her “horrible year” she was pale and grim. But when her decision to pay tax was announced two days later, she was beaming broadly—apparently believing that the public pressure was off her crowned head.

ANDREW PHILLIPS in London