The Queen’s True Worth, Part Two: Article Series by David McClure

  April 4, 2015 at 6:00 am by

Welcome to part two of our article series written by author and former Reuters journalist David McClure on Queen Elizabeth’s finances. This three-part series has been written as a summary of Mr McClure’s book, Royal LegacyHow the Royal Family have made, spent and passed on their Wealth from Queen Victoria to Queen Elizabeth II. Part one can be found here.

If you have any questions relating to the Queen’s finances, please leave a comment below or post them in the discussion thread for the book here and we will endeavour to get the author’s response.

The Queen’s True Worth, Part Two

The main source of the Queen’s income comes from an often-forgotten cash cow – the Duchy of Lancaster. If you leaf through its latest annual report, you would be forgiven for thinking that it was a quaint, old worldly estate. Splashed across the cover is the image of Lancaster Castle’s John o’Gaunt Gate and subsequent pages are almost branded with the Duchy’s ancient coat of arms of three passant lions below a royal banner. In fact, the Duchy dates back to 1399 when Henry IV made the estate the separate inheritance of the monarch, comprising of 18,458 acres of land in England and Wales, including the castles of Knaresborough, Lancaster and Ogmore.

But if you rummage deeper into the Duchy accounts, you find that it is in fact a lean and lucrative property company with a staff of 16 (including two executives on around £150,000 a year) managing a portfolio of assets worth £480m. The jewel in the crown is Savoy Estate, two acres of prime West End real estate sandwiched between the Savoy Hotel and Somerset House. In the last two decades, as commercial rents have mushroomed, Duchy revenue for the Queen has grown by almost £10m, rising from £3.75m in 1992 to £13.6m in 2014. In the last two years alone the net surplus has jumped by a healthy 8.5%.

Not surprisingly, Parliament has long been keen to get its hands on such a bountiful beast. A Public Accounts Committee report concluded in 2006 that the Duchy income was nothing more than “an accident of history” and called on the Treasury “to review whether these arrangements remain appropriate to present-day circumstances.” The Duchy had a closer shave in 1972 when the Select Committee on the Civil List tried to get to grips with the royal finances and a minority report recommended the appropriation of the Duchy income.

If you drill deeper into the recently released Treasury papers from the period, you discover how sensitive this matter was to Buckingham Palace. Time and again strong hints were dropped by the palace (as well as some mandarins) that the Duchy was a no-go area. The plan of one committee member, John Boyd-Carpenter, to lump together all the hereditary revenues into a single pot prompted a revealing exchange of letters in September 1971 between the Chancellor of the Exchequer, Anthony Barber, and his Chief Whip, Willie Whitelaw: “Cobbold [the head of the Royal Household] would prefer our latest proposals to a link with the revenues of the Crown estates à la Boyd-Carpenter. His reason – which he would not want to give publicly – is that this might bring into issue the whole question of the revenues of the two duchies. I told him that this was what you had always feared.” The Treasury’s legal advisor, Sir John Fiennes, spelt out the matter more clearly in September 1970: “On all previous occasions one of the things which the palace has insisted on is that there should be no surrender of Duchy Revenues comparable to the surrender of the hereditary revenues of the Crown.”

Parliament first launched an attack on the Duchy as long ago as the start of Queen Victoria’s reign in 1837 when the Chancellor of the Exchequer tried to absorb its income into the public purse. He was talked out of it, no doubt influenced by the fact that the revenue was then just £5,000 a year – in Treasury terms, chicken feed. But Prince Albert, with his Germanic zest for order, soon set about reorganising the estate along commercial lines and by the end of Victoria’s reign, revenue had skyrocketed to a remarkable £64,000 p.a. The old Queen liked to live grandly and, as her recent biographer A.N. Wilson has argued, “the real source of Queen Victoria’s wealth…was the Duchy of Lancaster” and that “she laid the foundation for the prodigious wealth of the present British Royal Family.”

Exasperated at the monarch’s extravagance, the Liberal MP Sir George Trevelyan used the pseudonym of Solomon Temple to write in 1870 a notorious pamphlet entitled “What Does She Do with It?” At the risk of lèse-majesté, the same question might be posed of today’s Queen and her £13.6m Duchy income.

This article is based on David McClure’s Royal LegacyHow the Royal Family have made, spent and passed on their Wealth from Queen Victoria to Queen Elizabeth II (Thistle Publications 2015, available from or as e-book or paperback).

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