Her Majesty (17 page)

In February 1991, as British forces prepared for war in the Gulf following the Iraqi invasion of Kuwait, the
Sunday Times
devoted its leader column to one of the most withering attacks on the Royal Family for many years. The article contrasted two sides of British youth – those in uniform going into battle versus fringe members of the House of Windsor going on holiday. Beneath the headline ‘Royal Family At War’, the column declared: ‘It is the exploits and public demeanour of the minor royals and nearly royals which causes most offence.’ The examples listed were flimsy. Evidence for the prosecution included some party snaps of the Queen’s nephew, Viscount Linley, and recent Parisian trysts involving the Princess of Wales’s brother, Viscount Althorp. Both were private citizens and neither was any sort of burden on the state. The impression created, however, was of a privileged, debauched elite being propped up by the taxpayer.

There were heated scenes on phone-ins and chat-show sofas as royal defenders voiced their support for the monarchy. The Palace press office produced an extensive list of royal engagements involving troops in the Gulf and their families. Even so, for a monarch so bound up with the Armed Forces, this was wounding stuff. Complacency had set in after
the sunny years of weddings, babies and the Silver Jubilee. Suddenly, parts of the media had diagnosed a royal ‘problem’. And it was all wrapped up with that even more damaging non sequitur: ‘Why is the Queen exempt from tax?’

In broadsheets and tabloids alike, the tax issue quickly gathered momentum. The Queen’s exemption was not some clever accounting wheeze. Nor was it an ancient privilege. It had only been established for half a century, having been agreed with her father by Prime Minister Neville Chamberlain in the wake of Edward VIII’s abdication. George VI had incurred huge expenses paying off his brother but it was decided that a tax break was far tidier than agreeing a new Civil List arrangement. The Civil List option would have involved pushing the deal – very publicly and painfully – through Parliament. A tax deal, it was concluded, would produce the same result but could be done quietly. And, in due course, the Queen inherited the same system. Now, decades later, it had suddenly become a live issue after the details were revealed in a television documentary. Similarly, there was a new media vogue for ‘rich lists’ in which the Queen was routinely portrayed as the multi-billionaire owner of the Crown Jewels, Windsor Castle and the Royal Yacht. She could no more sell these than the Prime Minister could flog Big Ben but the impression had taken root. In the absence of any official figure for the Monarch’s private wealth, the guesswork could be spectacular. Charles Anson, her Press Secretary at the time, remembers the mood only too well: ‘Day after day, every other story would be followed up with “What’s more, the Queen doesn’t pay tax.”’

What the media did not know was that the Queen had already been pondering the same issue herself. Behind the veneer of calm, the Palace was in turmoil. ‘It was a difficult subject,’ says Lord Airlie. ‘There was media pressure. But on very important things like this, the Queen, rightly, doesn’t wish to be rushed. I always say: if you’re being pressed by the media, count to ten.’ Lord Airlie and the Palace reformers were not only thinking about ways of paying tax but had a further plan: if the Queen took the rest of the Royal Family off the public balance sheet and paid for them herself, a lot of heat would go out of the arguments about ‘minor royals’. The Queen had already been doing this for her cousins, the Kents and Gloucesters, for fifteen years. The cost for the rest of the Royal Family was running at
£
1.8 million. ‘We were thinking the whole thing through very carefully,’ says Lord Airlie. ‘We had to make sure she could afford it.’

The Queen receives most of her Privy Purse (private) income from the annual surplus of the Duchy of Lancaster, an ancient estate covering
46,000 acres of countryside and a few urban sites including some prime land around London’s Savoy Hotel. In 1992, it was producing £3.6 million a year. The Queen would have no trouble paying tax on those revenues, of course, but what if she was also supposed to pay for everyone else out of the same pot? The whole point of the Privy Purse was to give the monarchy some independence from government. How long before the entire royal machine became entirely dependent on public funds, a sort of pageantry sub-division of the Civil Service? These were the sort of worst-case scenarios which had to be examined as Michael Peat and his team did their sums. In the media, some royal supporters offered the lame argument that the Queen, as the living embodiment of the Crown, could no more tax herself than prosecute herself. But the fact was that previous monarchs
had
been taxed. What’s more, the Queen was minded to go ahead. There was one stumbling block, though – the Prime Minister. He was not convinced. ‘The fact of the matter is we would not have required the Queen to pay tax. I
did not
require the Queen to pay tax,’ says Sir John Major firmly. So here was a faintly hilarious situation: a non-taxpayer trying to give money to the Inland Revenue
against
the wishes of the government.

Charles Anson remembers the strange contrast between media heat and Cabinet cool: ‘John Major didn’t want to do it. Even the Treasury were reluctant. But the media, not just the tabloids, were absolutely on a roll about tax.’

‘I don’t think any Prime Minister knows what it’s like to be pushed in that way,’ says one of those involved. ‘I mean, consistent tabloid pushing at the monarchy’s privileges was becoming pretty wearing. The Queen was clever enough to see the advantages that if she did pay tax, a lot of heat would go out of the financial pressure on her.’

John Major was not the only one advising caution. Queen Elizabeth The Queen Mother was continuing her guerrilla war against the modernisers from within her Clarence House redoubt. Her stern opposition to the creation of lady members of the Order of the Garter had only just subsided following the installation of Lady Thatcher, a firm favourite. Now she had caught wind of the tax discussions. Once again, the Clarence House guns were primed. The Queen Mother was not merely opposed to tax reforms for the sake of it, she was also fearful that any change might reflect badly on her late husband who had secured the original tax exemption from the government. The Queen dispatched her Private Secretary, Sir Robert Fellowes, to outline the details to her mother. ‘When I finished,’ he told William Shawcross, ‘there was a long pause and then she said, “I think we’ll have a drink.” In other words,
she thought it was completely wrong but she didn’t want to hear about it.’

The Queen none the less followed her instincts. Her advisers had done their sums and had shown her that it was viable. In the end, Sir John Major came round to the idea, too. ‘There were cases for her to do it,’ he says. ‘Those cases were advanced by the Palace. We discussed it. I agreed with it.’ He would have loyally supported the status quo. But it was the Palace which was driving the changes. ‘We worked hard on this,’ Lord Airlie recalls, ‘and, in February 1992, we entered into a discussion with the Inland Revenue.’ There would need to be exhaustive and secretive investigations to establish what was taxable and what was not. But the process was under way. Nine months later, it would turn out to be a godsend.

It was exactly forty years earlier, in February 1952, that the Queen had acceded to the throne as she sat in a concealed treehouse, watching the wildlife stir beneath a Kenyan dawn. Now, in February 1992, she did not want any sort of Ruby Jubilee celebrations. She had even vetoed a fountain in her honour in Parliament Square. She had, however, agreed to another epic royal documentary,
Elizabeth R
. Unlike the ground-breaking 1969 film,
Royal Family
, this equally dazzling 107-minute film was more focused on the Queen herself. The portrait of a dutiful mother, grandmother and head of state proved to be an award-winning hit. But any hopes that it might calm the rattling of media pitchforks at the Palace gates were to be dashed within weeks. The year had started with awkward newspaper revelations of photographs confirming a friendship between the Duchess of York and a Texan businessman. Of greater concern was the rift between the Prince and Princess of Wales. It was becoming an open secret. During a tour of India the same month, the Princess’s solo (and wistful) appearance at that peerless symbol of love, the Taj Mahal, had been calculated to send out a message to the world. She could not have been louder or clearer had she used a loud hailer.

The following month, Britain was embroiled in a particularly tight general election campaign. Having replaced Margaret Thatcher as Conservative leader less than two years earlier, John Major was seeking a mandate from the people. After thirteen years in opposition, Labour, under Neil Kinnock, was running him close. During any campaign the monarchy is expected to carry on quietly without upstaging the democratic process. Throughout this election, however, the royal story continued to take centre stage. The death of the Princess’s father, the 8th Earl Spencer in March 1992, was followed by stories of further rows between the Prince
and the grieving Princess. In the same month, it was announced that lawyers had drawn up separation plans for the Duke and Duchess of York. The decision was not entirely surprising given the recent reports about the Duchess’s private life but the election was duly consigned to the inside pages again. The story continued to grow following official confirmation of the separation and an unimpeachable BBC report that ‘the knives are out for Fergie’. The Queen, for whom all this must have been profoundly distressing anyway, felt honour-bound to apologise to the Prime Minister for all these distractions. ‘I remember a call to Number Ten at the Queen’s request being made very rapidly,’ says one of those in the crossfire.

John Major won the election and politics duly returned to a more familiar, steady pace. Not so the monarchy. The procession of extraordinary royal revelations was merely gathering momentum. In April, it was announced that the Princess Royal had commenced divorce proceedings, the first of the Monarch’s children to do so. In June, the remaining veneer surrounding the Waleses’ marriage was eroded by the publication of
Diana: Her True Story
, Andrew Morton’s account of the Princess’s unhappiness. At first, the Princess assured Robert Fellowes – her own brother-in-law – that she had never spoken to Morton. When it transpired that she had communicated with him via an intermediary, Fellowes offered the Queen his resignation. It was refused.

The Highlands offered the Queen no respite during her annual spell at Balmoral. First, came the
Daily Mirror
’s publication of intimate photographs of the Duchess of York and her financial adviser beside a French swimming pool. In the same month, the
Sun
reproduced transcripts of a three-year-old conversation between the Princess of Wales and her friend James Gilbey in which she spoke candidly about her unhappiness within the royal fold. Within five months, a similar conversation between the Prince of Wales and Camilla Parker Bowles, the future Duchess of Cornwall, would be laid bare in similar fashion. Come the autumn of 1992, an important tour of South Korea by the Prince and Princess would place the couple under the international spotlight. The visit proved to be a commercial and diplomatic success but a public relations nightmare. The media scrutinised every handshake and greeting line like marriage guidance counsellors.

Even when the couple were photographed looking solemn at a war cemetery, it was reported as another case of domestic unhappiness. ‘It’s a cemetery,’ groaned one despairing press officer, attempting to put a wreath-laying in perspective. ‘What did you expect? Cartwheels?’ But there was no changing the narrative. And nor was it entirely wrong. This
would be the last tour the Prince and Princess would undertake together. Soon after their return, the Queen was dealt another blow, one which would become emblematic of this abysmal run of events. On 20 November, a team of builders working on the north-east corner of Windsor Castle went for their mid-morning break, leaving a curtain draped over a scorchingly hot work lamp.

Within minutes, the greatest of all the royal residences was ablaze. The building work had at least emptied that particular part of the castle of both people and contents. But the blaze could not be contained. The only member of the Royal Family in residence, the Duke of York, helped coordinate a brisk and efficient evacuation of all the treasures in the path of the flames as they crept upwards and outwards through the 1,500-room castle. Priceless works were passed hand to hand down human chains to rest beneath open skies. Mercifully (for the works of art, at least), Windsor was spared a downpour that afternoon. Having rushed down from London, the Queen joined in herself. ‘It was just awful for her,’ says Lord Airlie. ‘Awful, awful, awful. It was a dark, miserable drizzly November day and here was this fire roaring across this fantastic building.’ He shivers at the recollection of the Queen watching the flames tear through her childhood home. ‘Needless to say she was incredibly stoical about it all.’ But what sort of impact would all this have on her? Her staff were worried. ‘For a woman to lose her house, her nest, is very traumatic. A lot of her heart is at Windsor,’ says Charles Anson. ‘And the Duke of Edinburgh was on an official visit overseas when it happened. Obviously, the Queen had to come back to Buckingham Palace on the evening of the fire and about six of us went to her private entrance thinking: “Prince Philip isn’t back yet and it will be quite a lonely thing for her coming back by herself on a day like this.” And I remember feeling distinctly nervous about it, because what do you say? So, she came in and we all murmured: “We’re so sorry, Ma’am.” And she was brilliant. She looked very calm and said: “The maddening thing is I’ve lost my voice. I have a cold and the smoke has made it so much worse.” We all said how sorry we were again and she said: “It was ghastly but we managed to save the pictures.” This wasn’t put on. She was just going to weather it.’