Diana's Nightmare - The Family (32 page)

SEVEN days after the initial Camillagate revelations in the
Daily Mirror,
a largely unexplained fire swept through Windsor Castle, damaging seven State apartments. It was the Queen's forty-fifth wedding anniversary, and she was alone as usual. Prince Philip was attending a World Wide Fund for Nature conference in Buenos Aires.

The fire generated a great deal of sympathy for Her Majesty until, while the embers were still warm, the National Heritage Minister, Peter Brooke, jumped to his feet in the House of Commons and promised that the taxpayer would meet the full cost of repairs estimated at £60 million. The Government, however, had seriously misread the mood in the country. To quell universal indignation, Major immediately declared that the Queen and Prince Charles had agreed in principle to pay tax. Details would be announced in the New Year. Everyone apart from the Queen, the Queen Mother and Prince Philip would also be dropped from the Civil List. For a Prime Minister pledged to a 'classless society', the trapeze artist's son from Brixton seemed to spend an inordinate amount of time walking the royal tightrope.

The details duly appeared in the form of the grandly titled Memorandum of Understanding on Royal Taxation, signed by officials representing the Queen, Prince Charles, the Treasury and the Inland Revenue. It was made public just as a Gallup Poll showed that all sections of society wanted a reformed monarchy and four out of five people thought that 'too many members of the Family lead an idle, jet-set kind of existence'.

As usual, the Queen was thinking a couple of moves ahead. She agreed to open up Buckingham Palace to the public, the proceeds going towards the cost of repairing Windsor Castle.

The
Wall Street Journal
estimated that the monarchy cost Britain's taxpayers 'almost double the combined cost of the monarchies of the Netherlands, Sweden, Spain, Belgium, Denmark and Norway'. This uncomfortable disclosure was reinforced by a careful reading of the Memorandum on Taxation. It stated that while the Queen would be taxed on her private income, her prodigious inherited wealth, which included the deeds to Sandringham and Balmoral, and royal perks, such as
Britannia,
would remain untouched. She and Charles, who was a party to the arrangements on behalf of the Duchy of Cornwall, could also opt out of the scheme from 6 April, 1994, 'or any later date'.

Apart from a Civil List payment of £7.9 million to meet expenses the Queen incurred in carrying out her official duties, it cost a total of £50 million to maintain her royal residences, to keep
Britannia
afloat, the Queen's Flight airborne and the Royal Train on the rails. A further £20 million went on providing twenty-four-hour security for the Queen and her family.
Britannia,
decked out with a full complement of 249 Royal Navy crew, cost £35,000 a day to run. When in use, the ship had a twenty-six-strong Royal Marine band to provide music and the flowers on all six decks were hand-picked in the Windsor Castle gardens. If costs were calculated on the basis of the twenty-seven days the Royal Family actually used the yacht in 1992, the figure was £463,000 per working day. This included a two-week holiday in the Caribbean for Prince Philip to get some remedial winter sun.

As for the Civil List, the memo showed that the state would no longer pay for Prince Andrew (£249,000), Princess Anne (£228,000), Princess Margaret (£219,000), Prince Edward (£96,000) and Princess Alice of Gloucester (£87,000). The total of £879,000 would be paid out of the profits available to the Queen from the Duchy of Lancaster, her ancient landed estate. Every penny would be tax deductible in assessing her tax and capital gains liability. So would many other items of Royal Household expenditure, right down to the buttons on a footman's jacket.

The old arrangements involving the Crown Estate, which owned property valued at £1.8 billion, and the Duchy of Lancaster, with assets valued at £55 million, would remain in place. The Crown Estate, which owned 250,000 acres of agricultural land in England and Scotland and prime residential and commercial sites mainly in the heart of London, was the holding of the sovereign in the right of the Crown — in other words, it wasn't considered a private possession. The sovereign had continued to surrender most of its revenue of around £70 million a year to the Exchequer in exchange for the Civil List.

The Duchy of Lancaster, however, provided a tax-free revenue of more than £3 million a year, which was paid to the Keeper of the Privy Purse for Her Majesty's use. As well as land holdings, the Duchy had diversified into stocks and shares and amassed liquid assets valued at £22 million. In 1992, the Queen withdrew £3.75 million from the Duchy's profits, mainly for her private expenditure and her relatives.

The bottom line of the whole deal was that the Queen would pay between £1 million and £2 million a year in tax on the income from her personal wealth. The Duchy of Cornwall, which had £35 million in assets apart from land holdings as diverse as Dartmoor Prison and The Oval cricket ground, was similarly blessed. Charles could claim the cost of running Highgrove and the money he paid to support Diana and the princes as tax deductions.

The tax deal completely ignored the extra costs involved when the Royal Family travelled abroad on official visits. The bill to the taxpayer for clothes, including Prince Philip's suits and the Queen's outfits, food, accommodation, the salaries of additional staff and presents for their hosts averaged £4,158 a day, the Foreign Office disclosed in answer to unrelenting parliamentary probing. In the financial year 1992-93, the Queen and the Duke received £157,000, the Prince and Princess of Wales £133,000 and other royals £163,000 - a total of £453,000 in extra funding. The Waleses' valedictory trip to Korea, it was revealed, had cost taxpayers £57,000 and they hadn't even got a happy, smiling picture for their money.

ALTHOUGH opinion polls showed a decline in the monarchy's popularity, the memo proved that the Queen still maintained a great deal of clout. 'The strength of monarchy does not lie in the power that it has but the power that it denies others,' Sir Antony Jay explained in the TV documentary
Royal Family
as long ago as 1969. Applied to her tax situation, this meant she had done exactly as she wished.

Prince Charles updated that view when he told royal writer Douglas Keay: 'I don't think people realise just how much influence the monarch does and can have. And its influence is very often more effective than direct power.' During the worst moments of the
annus horribilis,
some of this influence seemed to have been exercised by a process of osmosis.

'The Queen doesn't need to issue commands asking for action to be taken,' said a Whitehall insider. 'Her closest advisers sense that a particular thing needs to be done and they know a man who'll take care of it. The Good Chap style of government ensures that things are done on a nod-and-a-wink basis.'

This placed the blame for much of the mishandling of the Diana and Fergie problems fairly and squarely on the Palace secretariat, headed by Sir Robert Fellowes, a tall, bespectacled Old Etonian married to Diana's sister Jane and the cousin of Major Ron Ferguson. His problems started when photographs of the Duchess of York sharing a holiday in Morocco with Steve Wyatt turned up in the Texan's Chelsea apartment months after he had moved out. The Andrew Morton book, the St Tropez pictures, Squidgy and the first rumblings of Camillagate placed Sir Robert in a no-win situation. But he was unquestionably loyal to Her Majesty, even at the risk of incurring the wrath of his relatives.

'The Duchess of York bitterly recalls his treatment of her before the breakdown of her marriage,' said writer Christopher Wilson. 'He would barge into her room at Buckingham Palace, without knocking, with a handful of Press clippings flapping in his hand. "Not done very well today, have we, Ma'am?" he would bark as the Duchess was forced to leaf through a hotchpotch of reports of her previous day's doings. It was inevitable Fergie would get things wrong - but instead of help from the one courtier who could guide her, she was met with a wall of indifference.'

When the Yorks' separation was announced, Charles Anson, the Queen's Press Secretary, delivered a critique on the Duchess of such devastating invective to Paul Reynolds that the BBC court correspondent reported: 'The knives are out for Fergie at the Palace.' Anson apologised to the Duchess for his remarks and to the Queen for his blunder. Inexplicably, he kept his job. if I were running a mighty enterprise, my first-line managers would not have been the present courtiers,' said the informed peer. 'I think they are men fundamentally decoupled from reality.'

'They are prats - they aren't streetwise and there is no one who can handle the Press,' said Harry Arnold, who has dealt with the Palace Press Office for years. 'We have the situation of the Queen's second son, whom we accept she loves and some say she favours, being made to look an idiot by trying to conduct a marriage with a woman from whom he is separated - a woman who was humiliated by a civil servant, Charles Anson. It seems extraordinary to me, but the Queen allowed him to stay in office. I think her judgement has been appalling.'

More important than her Palace executives were members of the Privy Council, the Queen's powerful constitutional advisers over whom she presided. 'When Henry VIII was on the throne, the idea of the Privy Counsellor grew because you had access to the King's privy - you were able to sit with him while he was on the loo in the water closet,' said Andrew Morton. 'The idea of the King or Queen having a private life was inconceivable.' This concept had changed somewhat during the intervening five hundred years. 'Becoming a Privy Councillor is much more significant than gaining a peerage or being a courtier,' said a Whitehall source. 'The Queen feeds some extremely personal opinions into the Privy Council using the mechanisms at her disposal. They have a great reverence for this particular monarch.'

'If there is a hidden agenda relating to the monarchy, the Privy Council will want to see as little change as possible,' said the informed peer. 'They recognise social pressures but will not scramble into change just because there's a feeding frenzy in the tabloids. These are thoughtful men who feel extremely privileged to be where they are.

'But there will be good quality concessions to tidal shifts in opinion. Paying income tax, cutting the Civil List and opening up Buckingham Palace to the public are practical steps. But they won't change the monarchy. What happens, though, if you abolish the hereditary component in the House of Lords? How would that affect the monarchy? If the monarchy had the only remaining line of succession, it would seem an absurd anomaly.'

MANY of the Queen's friends over the years have owed their position entirely to the hereditary system, but some are self-made.

So personally enthralled with his sovereign was the life peer Lord Rab Butler that, as a director of Courtaulds, he arranged for her to acquire one of the world's largest cotton plantations at Scott, Mississippi, a community situated on the banks of the Mississippi River on the border of Arkansas. Worth more than £15 million, it consisted of 38,000 acres of rich soil and a factory as well as a mill employing hundreds of black labourers. She even received American government subsidies for not planting cotton, according to Senator Thomas Mclntyre of New Hampshire.

Her Majesty's old friends have long included the Duke of Grafton, who was once tipped as the bachelor most likely to marry her. His estate, Euston Hall in Norfolk, is conveniently close to Sandringham to allow him to be summoned in times of trouble. Her Master of the Horse, Lord Somerleyton, of Somerleyton Hall in Suffolk, officiates at all important equestrian ceremonial events and once amused her by gracing the great hall of his home with a huge stuffed polar bear. The Marquess of Abergavenny, Her Majesty's representative at Ascot, and his younger brother, Lord Rupert Nevill, are always on hand to chat about racing matters. One she can call on for advice in more formal matters is the Duke of Norfolk, the Premier Duke and Earl Marshal of England and father-in-law of the television personality Sir David Frost.

Foreign royals with a place in her heart include her husband's cousin, the exiled King Constantine of Greece, who has been known to dash to her side from his home in Hampstead at the first inkling of a family crisis. She also cares greatly for Prince Georg of Denmark, who married Prince Philip's favourite sister, Sophie. King Juan Carlos of Spain grew closer to Her Majesty when he proved an able link to Charles, taking the opportunity during their shared family holidays on the island of Majorca to counsel him on how his marital difficulties added to his mother's burden of worries.

The only colonial in this privileged pack had been the Australian Sir William Heseltine who worked hard during his terms as Press Secretary to try to present the Royal Family as real people living in the modern world. She rewarded him for his efforts by making him her Private Secretary before Sir Robert Fellowes.

But it was the Earl of Airlie who was appointed as her Lord Chamberlain, titular head of the Royal Household. A man whose forebears had been royal courtiers for generations, his connections with court go even further: his brother, the Hon Sir Angus Ogilvy, is married to the Queen's cousin Princess Alexandra, and his American heiress wife became a lady of the bedchamber.

Douglas Keay observed that the Queen's friends need to be 'keen on racing, shooting, dogging and stalking. Broadly, they could be described as dull but good'.

Among the less grand women she is known to trust is Nancy Fenwick, wife of a former Head Keeper at Windsor Castle, Bill Fenwick. Known as the Queen's Dog Lady, Nancy is responsible for breeding the royal corgis and would summon HM to her home to witness the puppies' arrivals whenever she was in the vicinity, regardless of the hour. 'You have to be pretty close to get the Sovereign out of her bed for the birth of a dog, but that's just what Nancy does,' said a courtier familiar with the Queen's favourite people.

During her lifetime, Princess Grace was among those whose company the Queen especially enjoyed. Once, at a party at Claridge's, the Queen watched Andrew, fuelled only by orange juice, careering round the dance floor and asked Grace: 'What would you do with a son like that?' The former film star replied: 'I wouldn't worry. I always tell my son Albert that if he could stick to orange juice his future would be assured.'