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Royalty or Republic – a reckoning

posted 1 May 2011, 11:18 by Admin uk

 By Michael Roberts

 The weekend in the UK was dominated by the ‘Royal Wedding’ of Prince William (grandson of the current monarch Queen Elizabeth).  Around 20 million Brits apparently watched the ceremony on TV, but that was probably because there was nothing else on all day on a special public holiday!

What was striking about the occasion was the dress of all the male appendages of the ‘royal’ Windsor family (formerly called Saxe-Coburgs – as they are German in origin – they changed the name to remove any association with Britain’s enemy in World War One, their cousin, Kaiser Wilhelm).  All the men wore military uniform of a particularly archaic nature – all red, stiff and with lots of medals and swords.  It should remind you that the British monarchy has ruled over a militarist empire for hundreds of years.  And of course, the original role of a monarchy, rulers by birth, before any form of bourgeois democracy, was to act as the head of the state and that meant, the armed forces, the latter ensuring the wealth and property of the ruling class.

British capitalism never threw off the anachronism of a monarchy – although the bourgeois revolution of 1641-60 did achieve it for a while.  The monarchy (a ruling family) was used by the elite to try and cement the people behind the ‘nation’ as a ‘neutral’ force above politics.  Of course, this was an illusion, but the monarchy was made ‘constitutional’ and ‘pomp and circumstance’ were promoted, particularly in the hey-day of the British capitalism in the 19th century.  Nearly all the ludicrous military uniforms and protocols were invented in that period to suggest some sort of stability for the nation to be embodied in a ‘royal family’ and a House of Lords.

Those who support the idea of the monarchy in Britain like to make two economic points to back it.  First, they argue that all the property, lands and income of the royals are actually owned by the state, the democratically elected government.  So the royals are just serving the nation and are not wealthy.  Second, that the cost of the British monarchy is worth every penny, especially given all the tourist revenue it pulls in.

It’s true that most (not all) royal residences are owned by the state.  But they are maintained at taxpayers expense.  The whole Crown Estate encompasses about 360 buildings including Windsor Castle, Clarence House, St James Palace and parts of Kensington Palace. Many of these properties are occupied on a ‘grace and favour’ basis by the Queen’s private secretaries and other staff ie. for nothing or at low rents charged by the Queen.  Often monarchists claim the royal family selflessly ‘surrendered’ this property back in the early 19th century.  But these properties were never ‘owned’ by the royal family but were properties of the ‘monarchy’ or the feudal state.  Indeed the Queen’s great grandfather, George III, ‘gave’ this royal property to the government only to get taxpayers to pay to maintain them.

The Crown Estate is a huge portfolio of property in London like Regent Street, Piccadilly and the Park Lane sites of The Four Seasons and Intercontinental hotels. 12,000 tenants are paying rent on 560 square miles of land across England and Wales. The estate even includes all UK coastal waters within 12 miles of land, where energy companies are increasingly paying to construct wind farms. Valued at $12 billion.  Last year the Crown Estate alone generated $342 million. But, as with virtually all these royal assets, that cash went straight to the UK government. In return, the taxpayer pays the Queen and other royals a fixed, annual allowance.

There’s one exception. The UK government still hands the Queen income from the smaller of the two property portfolios. Last year she received $21.8 million from the so-called Duchy of Lancaster. Taxpayers also give Elizabeth Windsor an annual allowance of $23.3 million for performing 360 engagements a year as Head of State.   Taxpayers also pay the Queen $25.9 million in expenses to maintain her palaces. $6.4 million towards the Royal Train, helicopters and jets. And an additional $6.4m towards other costs, like State Visits.  In total, each year the Queen gets $83.8 million from the government and the estates.  It’s widely assumed Elizabeth also receives a multi-million dollar income stream from her private portfolio of stocks and bonds.

And that’s just the Queen.  Her son and heir, Price Charles is much richer.  As Elizabeth’s first male son, Charles instantly became heir to the throne at birth and inherited a property portfolio currently worth over one billion dollars: 200 square miles of land known as the Duchy of Cornwall.  Last year, that estate generated $28 million in cash for Charles.  The government does not own this estate. Charles actively manages it. The Queen can lay personal claim to a country house in Sandringham, a few stud farms, Balmoral Castle in Scotland and her father’s stamp collection. Forbes says that’s worth $500 million.  So the Windsors are billionaires in their own right and yet receive handouts from the taxpayer every year.

Still if the cost of the British monarchy to the taxpayer is about $85m a year, that’s just $3 per household.  That sounds cheap, considering the supposed benefit to the UK economy from people visiting Royal palaces from abroad and spending dollars in the UK and royals like Prince Andrew acting as ‘ambassadors for Britain’ abroad (ho,ho).  But that cost is a serious underestimate.  It excludes the loss of revenue that the state incurs from forgoing various taxes and the cost to local authorities of policing and other administration for the royals.   If you include the lost revenue from the estates that the royals receive income from directly, the total annual cost is closer to $300m a year, or $10 per household.   That more than matches the likely extra tourist revenue raised from foreigners coming to gawp at the changing of the guard in Buckingham Palace.

Monarchists argue that this cost would still have to be incurred if Britain were a republic as you would need a president or head of state and they don’t come cheap either.  Look at the cost of presidency in the US.   The official budgeted cost of the White House is $110m a year, only slightly more than the British monarchy but with five times the population and eight times the GDP.  But the Brooking Institution reckons that excludes lots of other costs, including helicopters, the press and communications operation, the secret service etc.  If you include all this, you can tot up an annual figure of $1500m, or about $10 an American household, similar to the real cost of the British monarchy.  But it’s not like for like.

Even so, I’m sure the founding fathers of the American republic, those great bourgeois revolutionaries, would blanche at the cost of the American presidency, but even more at the venality of Congress.  They stood for cheap government.  At least the bourgeois republic had that aim even if the development of American empire put paid to that.  But the British monarchy has stood as an expensive and unnecessary excrescence on British people for centuries.

And it remains with hidden constitutional powers.  Supposedly, the British monarchy is constitutional ie it cannot say or do anything political and on behalf of the state unless directed by the government of the day.  But that is not entirely true.  The Queen still has the constitutional power to dissolve the British parliament and could rule on her own through what is called the Orders in Council, a council made up of appointed politicians.  And the monarchy is still the commander-in-chief of the armed forces (like the elected US president).  In theory, the British monarchy could rule and enforce its rule without parliament.

Of course, if the Queen were to dissolve parliament unilaterally, it would provoke a major constitutional crisis.  It would propose dictatorship.  But that does not mean it could not happen.  In 1975 in Australia, the governor-general of Australia (the Queen’s representative in that county, which still recognises the Queen as its monarch) dissolved the Australian parliament without consulting the then Labour prime minister Gough Whitlam.  This constitutional coup was designed to get more amenable conservative government into office in an election, a purpose that succeeded.

The wealth and income of the British royal family is one thing, the hidden dictatorial power of the British monarchy is more.