Elizabeth the Queen (74 page)

Cameron made the time-honored trip to the Palace five days after the general election on Thursday, May 6, resulted in the first hung Parliament since 1974. The Tory party had won 306 seats, but it was twenty shy of the majority needed to govern. Labour tallied 258 seats, and the minority Liberal Democrats (the party created in 1988 when the Liberals merged with the Social Democratic Party) captured fifty-seven seats, placing their forty-three-year-old leader, Nick Clegg, in the role of power broker as he considered overtures from the two other parties. The Liberal Democrats were in many respects more in line with Labour, but Cameron moved more nimbly than Gordon Brown, offering terms for a deal that Labour couldn’t match.

At one point Brown’s chief negotiator, Peter Mandelson, sought advice from Private Secretary Christopher Geidt at the Palace, who said Brown had a “constitutional obligation, a duty, to remain in his post” until a new government could be formed. As the period of limbo extended through the weekend, Geidt made regular trips to 10 Downing Street to get briefings. “It was important for Geidt to be visible, and to show that he was very much there on behalf of the Queen,” recalled Brown’s press spokesman and Palace veteran Simon Lewis.

During his final encounter with Clegg on Tuesday, Brown said, “I can’t keep the Queen waiting. Make up your mind, Nick.” In the end, Clegg accepted what Cameron later described as “a big generous offer to have a coalition government” that included making the Liberal Democrat leader deputy prime minister. Still, the deal for the first two-party government since World War II was subject to ratification by Clegg’s party. When Cameron met with the Queen after Brown’s resignation, “I said I couldn’t be totally sure about what sort of government I was going to form,” he recalled. “I said that I hoped to form a coalition government but I might have to come back in the morning and tell her it was something rather different.”

Cameron was the first Old Etonian to become prime minister since Alec Douglas-Home left office in 1964. The new prime minister came from a wealthy family of bankers interlaced with aristocrats including the 7th Earl of Denbigh. His father, Ian, was a stockbroker who taught his son about coping with adversity. Born with severely deformed legs, Ian managed to play tennis and cricket, endured repeated surgery, and finally suffered through amputation, always steadfast and devoid of self-pity. After attending Heatherdown with Prince Edward, David went to Eton and graduated from Oxford with honors. He spent much of his early career as a backroom strategist for the Conservative Party and honed his ability to get his message across during seven years as a public relations executive at Carlton Communications, one of Britain’s leading media companies.

Once he was elected to Parliament in 2001, Cameron rose to the top in just four years, working to modernize the Tory party by emphasizing individual initiative as well as social justice while tackling government excesses. Handsome, easygoing, and quick on his feet, he struck the right notes in the way Tony Blair had done with the Labour Party. His wife, Samantha, the daughter of a baronet, cut a stylish figure, and they had three young children. The eldest, Ivan, born with cerebral palsy and severe epilepsy, was unable to eat on his own, speak, or walk. Although he required round-the-clock care (including twenty-six doses of medicine a day), the Camerons tried to include him in as many family activities as possible and expose him to the outside world.

In 2009, Ivan died at age six from the complications of his illness. Gordon Brown, who knew the pain of losing a child as well as caring for one with a serious chronic illness, spoke of his rival’s tragedy with unusual feeling on the floor of the House of Commons. Three months after her husband became prime minister, Samantha Cameron gave birth to their third daughter, although their happiness dimmed just two weeks later when Ian Cameron died of a stroke at age seventy-seven while on vacation in France.

David Cameron’s combination of matter-of-fact strength and ingenuous openness about his hardships simultaneously aligned him with the Queen’s instinctive stoicism and the post-Diana emotional accessibility she had come to accept as part of modern life. Aside from Cameron’s school days in the shadow of Windsor Castle, he and the eighty-four-year-old Queen found other common ground. He had grown up in the countryside, in a small village in Berkshire, where he enjoyed hunting and shooting. His father had a passion for horse racing, taking shares in several thoroughbreds. Like the Queen, the prime minister had a practical turn of mind, and spoke in an unusually forthright way for a politician. There was, in short, an ample comfort zone for the weekly audiences at Buckingham Palace, which Cameron could readily fill with self-deprecating humor and a companionable personality.

The coalition led by Cameron immediately had to come to grips with a brutal recession compounded by Labour’s legacy of government spending that had expanded from 40 percent of gross domestic product in 1997 to nearly half of GDP by 2010. The new government imposed cuts of nearly 20 percent across the board to slash a swollen budget deficit, and also raised taxes and tuition fees at universities. Students protested in the streets, but otherwise the British public endured the stern medicine after watching the economies of Greece, Ireland, and Portugal nearly collapse under the weight of unaffordable entitlements.

The royal budget was not immune from either scrutiny or action when the ten-year funding for the Civil List expired in 2010. During the twenty years since Margaret Thatcher fixed an annual stipend of £7.9 million to cover the Queen’s duties as head of state, there had been no increases. The original formula had been set higher than the Palace had budgeted because at the time inflation was running above 9 percent. With yearly inflation at a far more modest average of 3 percent through the 1990s, the Queen’s treasurer took the surplus cash and invested it in a rainy day fund that grew to £35.6 million by the end of the decade.

When the Thatcher agreement ended in 2000, Tony Blair froze the Civil List for the following ten years, assuming that the reserve fund would top off the rising costs of running the royal household. By 2009, yearly Civil List expenses had climbed to more than £14 million, largely due to inflation, requiring a £6.5 million annual supplement from the Queen.

When George Osborne, the chancellor of the exchequer, presented his report on royal finances in June 2010, he praised the “careful housekeeping” at the Palace over the previous decade and said that the freeze on the Civil List amount would need to continue for two more years, which would exhaust the Queen’s remaining £15.2 millon reserve fund. In addition, Elizabeth II planned to spend nearly £1.3 million of her more than £13 million personal income from her Duchy of Lancaster portfolio to support the official expenses of three of her four children and other royal relatives working for the “Firm.” (Charles spent £9 million on his “official duties and charitable activities” out of his Duchy of Cornwall income of £17.1 million in 2009.) The costs of security provided by the police and the military for the entire family and the palaces remained a closely kept secret; estimates put it at more than £50 million annually.

In October 2010 the chancellor announced that the Queen’s household had further agreed to cut spending for 2012 by 14 percent, in line with the government’s austerity budget. At the same time, Osborne unveiled a historic change in financing the monarch’s official activities that he had devised in collaboration with Palace officials. Starting in 2013 the Civil List and various government grants will be scrapped. The new arrangement will give the royal household a single Sovereign Support Grant based on 15 percent of net income from the vast Crown Estate portfolio of property and investments that has belonged to the monarchy since the eleventh century. The Queen’s income will be pegged to the profit from two years previously.

Osborne’s solution is elegant in its simplicity and pragmatic in its consequences. It restores to the monarch a portion of the Crown Estate profits that King George III had relinquished in 1760 in exchange for the Civil List stipend. It also removes the need to periodically negotiate a payment plan with Parliament “so that my successors do not have to return to the issue so often,” said Osborne. With its capital value of £7.3 billion, the Crown Estate’s projected net income in 2011–12 of some £230 million is expected to yield about £34 million in 2013 for the Queen’s official business and provide the government treasury with £196 million.

The new arrangement is meant to keep pace with inflation, and will place safeguards on the downside and limits on the upside so the income will not be “adversely high.” Critics have argued that the monarch would no longer be accountable to Parliament, but in fact the Palace agreed for the first time to yearly scrutiny by the National Audit Office, which will report its findings to Parliament. The new system will also permit the royal household to decide how to allocate resources rather than rely on separate dedicated funds for maintenance and travel. Shoring up aging infrastructure will be an urgent priority. Buckingham Palace has been losing pieces of masonry from its facade, and the roof over the ballroom has sprung leaks.

Aside from landmark events and regular entertainments like the annual garden parties, diplomatic receptions, and state dinners, the Queen had already begun paring expenses in various ways. The era of periodic grand balls for friends and family was long over. To recognize two of her ladies-in-waiting, Susan Hussey and Mary Morrison, for serving fifty years apiece, the Queen hosted a low-key private reception at Buckingham Palace in June 2010 called “A Century of Waiting.” She recycled her outfits regularly, and for a state visit to Slovenia in October 2008 she asked Angela Kelly to create a gown for the state banquet out of silver and gold brocade fabric that had been given to her during a visit to the Middle East two decades earlier—a gesture the Palace called “credit crunch couture.” In the autumn of 2010, Elizabeth II announced that she was canceling the annual Christmas party at Buckingham Palace, cutting an estimated £50,000 from her £1.3 million catering and hospitality budget. A headline in the
Evening Standard
captured the mood: “EVERYONE LOSES … EVEN THE QUEEN.”

T
HE ROYAL FAMILY’S
relations with the press became less troublesome in the first decade of the twenty-first century. The main reason was the disappearance of a parallel court presided over by Diana that fed morsels of information to tabloid favorites. At the same time, the Palace had developed a more sophisticated view of the media. “We have no experts in royal history, but we understand the way the media works,” said one senior official.

Although Philip complained that the Queen read too many “bloody” newspapers, her daily habit has given her a good feel for the press. She had long since learned to sort out what was important and what was irrelevant, and how to distinguish between media opinion and public opinion. The Palace press office reached out to a greater cross section of “opinion formers” as well as local papers, and offered more frequent background briefings. “We are not about demystifying the royal family,” said one official. “It is about telling people what they do.”

As the circulation of newspapers dropped with the rise of the Internet, the Queen’s advisers realized they could get their message directly to the public—and particularly what Palace officials call “the space of young people”—through the monarchy’s website and its YouTube channel. Keeping pace with emerging technologies, the Palace launched its British monarchy Twitter account in 2009, although its use was confined to bulletins about the comings and goings of the royal family. By early 2011 there were more than 100,000 followers of the royal family on Twitter. Four months after its launch on November 7, 2010, more than 300,000 “likes” were registered on the Queen’s Facebook page.

But the social media only softened the lash of Britain’s national newspapers, which remained more influential than the press in the United States. In 2010 and 2011 their prime target was Prince Andrew, Britain’s special representative for trade and investment since 2001. His global peregrinations earned him the nickname “Air Miles Andy,” and he was severely criticized for his contacts with unsavory dictators in places like Kazakhstan and Azerbaijan, not to mention the American billionaire Jeffrey Epstein, who had served time in prison for pedophilia. Reporters routinely questioned the value of Andrew’s unsalaried role, which cost the British government nearly £600,000 annually for overseas travel, hotels, and entertaining—plus his £249,000 annual allowance from the Queen to run his private office.

Government officials credited Andrew with helping British firms win multibillion-pound contracts for such projects as the Dubai metro and jet engines for Air Asia. His lobbying for British industry was most effective in Asia and the Middle East, where he was friendly with leaders such as Jordan’s King Abdullah II, with whom he hunted in Morocco and Tanzania. “It’s not about the power of royalty, it’s about personal relationships,” said Andrew. “If you know the right people you can have a positive outcome.… If you are competing with other countries, you have to deploy as many assets as you can. I am one of those assets.” Nevertheless, Andrew’s questionable associates and poor judgment disturbed the Queen and her advisers, and in July 2011 he stepped down from his job after serving for ten years. He still intended to promote British business, but on an unofficial basis, while focusing on helping develop apprenticeships for young people.

Andrew’s image had also been badly dented when his ex-wife got caught a year earlier exploiting her husband’s position in a mortifying episode that recalled the royal family’s misadventures of the late twentieth century. After their divorce in 1996, Fergie had been more than £3 million in debt, but she had returned to financial solvency by pursuing an array of lucrative business ventures. She even won the approval of her former mother-in-law, who included her in a weekend at Balmoral in August 2008 with Andrew and their daughters, Beatrice and Eugenie, the first time the outcast duchess had been to the royal Highland retreat since her hasty exit in 1992.