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00:00FIRE AND RESCUE
00:07Fire and rescue
00:08There's Winter Castle here
00:09Yes, we've got a fire in the private chapel at Winter Castle
00:12Fire in the private chapel
00:16We're to rendezvous the cause right here
00:26Just after 11 o'clock on the morning of 20th November
00:30I had a phone call from BBC Radio Berkshire
00:33Can you tell us about the fire at Windsor Castle?
00:36First I've heard of it
00:41What was the scene when you arrived?
00:43It was very dramatic
00:44There were quite a few fire appliances there
00:47A lot of fire
00:54Photographers and television crews
00:56The Brunswick Tower was just like a factory chimney
01:00Spouting orange flames
01:03That's the Brunswick Tower
01:04What?
01:05Brunswick Tower
01:06There was a certain amount of disbelief
01:09Because nobody can imagine something like the castle going up in flames
01:20About the middle of the afternoon, Queen arrived
01:22She was obviously devastated
01:24I suppose deep into her mind was
01:26Well, how are we going to get it all together again?
01:38Some events take on a symbolism of their own
01:41This castle, like the monarchy, had stood for a thousand years
01:45It was the Queen's much-loved home
01:48A childhood sanctuary during the Second World War
01:52And suddenly here it was
01:54A blaze
01:56But when it was announced that
01:58We, the taxpayers
02:00And not the Queen
02:01Would pay for the repairs
02:03It set off a dangerous reaction
02:0590% of public opinion would say
02:09The taxpayers shouldn't foot this bill
02:11Couldn't give a damn about what's going down in Windsor
02:13We're talking about the whole country
02:15And if Lizzie wants her fancy castle back
02:17Let her have it back
02:18But she can pay for it
02:19Because she can damn well afford it
02:22For a moment
02:23Our focus on the Royal Family
02:25Wasn't about scandalous gossip or affairs
02:28It was about money
02:29I don't see why now
02:30I should have to pay
02:31For somebody else's home
02:32Why should taxpayers have to pay for it?
02:35We are talking about
02:36The richest woman in the world
02:39All that outrage
02:40Sprang from the misunderstanding
02:41Because the truth is
02:43Windsor Castle
02:44Wasn't owned by the Queen
02:46But by us
02:47The nation
02:49So it wasn't unreasonable to expect
02:51That we should pay for the repairs
02:55But what had become clear
02:57Was that the subject of money
02:59Could become perilous for the Royals
03:01Good morning everybody
03:03This is the real centre of today's events
03:07I seem to have been reporting on the monarchy forever
03:10The lighting is all cock-eyed, isn't it?
03:12Are you pro-monarchy, Mr Dimbleby?
03:14Well, I'm pro-television series about the monarchy
03:18And there are important questions I want to ask
03:23Well, I've never talked about any of this before in my life
03:26I hope it all led me into very bad ways
03:28Bloody hell
03:30At a time when millions are struggling to make ends meet
03:34How is it that the royal family is making more money than ever?
03:38Thank you ladies and gentlemen
03:40For paying your rent every now and then
03:42Discovering how rich they really are
03:48Isn't that easy?
03:49The secrecy is institutional
03:51It's obsessive
03:53Of course he lives a life of luxury
03:55That's the life of a member of the royal family
03:57Where does their wealth come from?
04:01That is a huge amount of money flowing from the public purse
04:06Into the private pockets of the royal family
04:10Well, I had quite a few conversations with the queen about it
04:12And did she purr with pleasure when you explained how it worked?
04:16And are they worth it?
04:31The grand procession
04:46Which will bring Her Majesty to us
04:49On the day of the coronation
04:59I was 14 at the time
05:01I remember
05:02It was a very wet day
05:03Walking through the streets of London
05:05But it was a very grand affair
05:08Brazen display of glorious ceremony
05:15No expense spared
05:19The royal family was of course already rich
05:24Though not long into the queen's reign
05:27They did claim they were feeling the pinch
05:30If nothing happens
05:32They should either have to
05:34I don't know
05:35They have to move into smaller fences
05:37You know
05:38Over the years
05:40The queen and her advisers
05:42Achieved an extraordinary feat
05:44God save the king
05:54God save the king
05:55God save the king
05:56By the time of Charles' coronation
05:58He didn't just inherit the crown
06:00I am deeply aware of this great inheritance
06:04Astonishingly
06:06Astonishingly
06:07He inherited more wealth
06:09Than any monarch
06:10For generations
06:11And on top of that
06:13The sovereign grant
06:14That funds his public duties
06:16Is more than it ever was
06:18During the queen's reign
06:19To understand why
06:22It helps to do something
06:23That is slightly indelicate
06:25Which is to work out
06:26How much the king himself
06:28Actually is worth
06:30What he owns privately
06:32And what's ours
06:34As a nation
06:35And it's a particularly tall order
06:38Because if you ask them directly
06:40How much is the king worth
06:42You're met with a stony silence
06:48How big a team were you working on it?
06:50Had about 12 of us
06:51The actual task involved
06:52In answering a question
06:53How wealthy is the king?
06:55Is vastly more complicated
06:57Than it is to pose the question
06:59Our team spent months
07:01Trying to establish
07:02What we could see
07:03What we couldn't see
07:04And then we try to assign values
07:06Of everything that they own
07:09There are a huge number of properties
07:11That are associated with the royal family
07:13Buckingham Palace
07:14They don't own that
07:16It's what we would call
07:17Owned in right of the crown
07:18A dressed up way of saying
07:20It belongs to the United Kingdom
07:23So they can't sell it?
07:25No
07:26You've got Kensington Palace
07:28You've got St James's Palace
07:30You've got Clarence House
07:31These are all properties
07:32That are owned in right of the crown
07:34And do they live rent free?
07:36The king?
07:37For the most part, yes
07:38So that you or I
07:40Would have to pay rent
07:41To live in these places
07:42That's very true
07:43But they're not a normal family
07:46What private houses
07:47Does the king have?
07:48There's actually
07:49Only really two
07:53Sandringham Estate
07:54A vast estate
07:55Which includes
07:56Residential properties
07:57Tenant farmers
07:58The village of Anmer
08:01Second big private property
08:03Castle Balmoral
08:04That's not just a castle
08:05That's huge swathes of land
08:07Private property
08:08In all how much?
08:09All in all
08:10330 million pounds
08:11We think
08:12So what are their jewels?
08:14That they're famous for
08:15The royal family
08:16Find something for the
08:18Sapphires
08:19Diamonds
08:20And
08:21Yeah
08:22Tiaras
08:23And necklaces
08:24They're the most incredible pieces
08:25You've ever seen
08:26And for the most part
08:27Privately owned
08:28This is a nice piece of jewellery
08:29Right
08:30If you sold it
08:31It would raise a pretty penny
08:32But if you then tell people
08:33Oh and by the way
08:34Did you know Queen Elizabeth
08:35Owned this
08:36And she wore this
08:37The price
08:38Goes through the roof
08:39Of course
08:40Nobody can calculate
08:41What the Windsor premium is
08:42So we think
08:43Like applying
08:44A kind of very very
08:45Conservative premium
08:46Of ten times
08:47We think those are worth
08:49About 533 million pounds
08:51Bare minimum
08:52What about this?
08:54What's this great thing?
08:55Stamps
08:56It is the most comprehensive
08:58Collection of stamps
08:59In the world
09:00By far
09:01Bare minimum 100 million
09:02So nothing rivals
09:04Their collection
09:05Of jewellery
09:06Nothing rivals
09:07Their collection
09:08Of stamps
09:09Livestock
09:10Bloodstock
09:11Horses
09:12Bloodstock
09:13Horses
09:14Where did you go
09:15On horses?
09:16The Queen was very very
09:17Enthusiastic about horses
09:18She collected
09:20A stable
09:21Worth about
09:2227 million pounds
09:23Art is
09:25The hardest one to value
09:26There are corridors
09:27Lined with great
09:28Masterpieces
09:29But again
09:30You've got to distinguish
09:31Between the publicly owned
09:32Art and the privately owned
09:33Art
09:34There is no kind of
09:35Publicly available listing
09:36Of the art they privately own
09:37So one of the ways
09:38That we assessed this
09:39Was just to go through
09:40The photos they have produced
09:42Of the residences
09:43Where they live
09:44For example
09:45There is a Monet
09:46There is a Monet on the walls
09:48In one of the palaces
09:49But we think it's privately owned
09:51Based on what we can tell
09:52What they privately own
09:53We think about 24 million pounds
09:55But that's probably a very
09:56Significant underestimate
09:58Toss it all up
10:01And what do you come to?
10:02Altogether that's 1.2 billion
10:041.2 billion pounds?
10:07Yeah, it's very probably an
10:08Underestimate
10:09Because I would imagine
10:10That more of it is things
10:11That are harder to see
10:12The invisible assets
10:13Things like shares
10:14What was the reaction
10:15When you came up with this figure
10:16For all this wealth?
10:17Well, they didn't like it very much
10:19They said it was a creative mix
10:21Of sort of speculation
10:23And assumption
10:24And inaccuracy
10:25But in that case
10:26What's your figure?
10:28And it's when you don't get answers
10:30To reasonable questions
10:31You start to wonder
10:32Why there isn't a simple answer
10:38See the king and the queen
10:39Leading the charge here
10:40Stepping out onto the balcony
10:42It's no accident
10:44That there isn't a simple answer
10:46Over the years
10:48The royals have grown their wealth
10:50Apparently
10:51Without the public
10:52Really noticing it
10:53To understand
10:55How they managed to do it
10:57We need to go back
10:59To 1973
11:02A year most people remember
11:04For different reasons
11:08Good evening
11:09It's really been one of those weeks
11:10Hasn't it?
11:11As always
11:12Everyone's been blaming
11:13Everybody else
11:14For what's happened
11:15It was a winter
11:17Full of discontent
11:23The country in recession
11:26The government imposing
11:27A three-day working week
11:29Petrol and electricity
11:31About to be rationed
11:33And to save power
11:35We were even told
11:36We should clean our teeth
11:38In the dark
11:39The only light
11:43The only light
11:44Was the first royal wedding
11:46Of a generation
11:50But while we were distracted
11:52From our troubles
11:53By Princess Anne's
11:54Fairytale wedding
11:57The queen
11:58Had a problem to solve
12:03Ted Heath's government
12:04Was working
12:05On a new law
12:06Which would allow
12:07British companies
12:08To see the name
12:10Of any
12:11Of their shareholders
12:12So that
12:13Investors in companies
12:14Could no longer
12:15Keep their identities
12:16Secret
12:19At a time
12:20When many of her subjects
12:21Were worried about
12:22Making ends meet
12:26The queen
12:27Now risked
12:28Having her growing wealth
12:29Revealed
12:30But luckily for the queen
12:34There's a little known power
12:36That the sovereign has
12:37That doesn't apply
12:38To anybody else
12:39It's called
12:40Queen's consent
12:41Or rather now
12:43King's consent
12:44And it means
12:45The monarch
12:46Can take a view
12:47On any proposed law
12:49Sent to them
12:50Which affects
12:51Their private interest
12:52Before parliament
12:53Even gets a chance
12:55To look at it
12:56Over the queen's reign
12:58At least a hundred years
12:59A hundred and sixty laws
13:01Were designed
13:02In one way or another
13:03To exempt
13:04The monarch
13:05And they included
13:06Things like
13:07Health and safety regulations
13:09Wildlife protection
13:10The race relations act
13:12Equal opportunities
13:14With each of these laws
13:16She had the power
13:17To say
13:18It doesn't apply to me
13:19Thank you very much
13:24So in the week
13:25Just before her daughter's wedding
13:26The queen sends her emissaries
13:28Down to Whitehall
13:29To discuss
13:30Ted Heath's proposed
13:32Transparency law
13:33And these are the memos
13:35Which were leaked
13:36Later to the press
13:37About the discussions
13:39And they do say
13:40That it's potentially
13:42Embarrassing
13:43To the queen
13:44Embarrassing
13:45Again
13:46Three times
13:47Embarrassing
13:48In their discussions
13:49So they were
13:50Obviously worried about it
13:51The reply then comes back
13:53From the department
13:54That they have
13:55I love this word
13:56They have evolved
13:58The following solution
13:59The queen
14:02And subsequently
14:04Her immediate family
14:06Whoever that means
14:07Would be excluded
14:08From Ted Heath's legislation
14:10Those whom God
14:11Hath joined together
14:12Let no
14:16The queen
14:17Must have been
14:18Very relieved
14:19I am glad
14:20That my daughter's wedding
14:21Gave such pleasure
14:22To so many people
14:23Just at a time
14:24When the world
14:25Was facing
14:26Very serious problems
14:27The queen
14:29Now had a purpose-built
14:30Legal mechanism
14:31To hide her
14:32And her family's wealth
14:34And it's remained hidden
14:35Ever since
14:36Do you have any right
14:37To know what the king's
14:38Investments are
14:39His private investments?
14:40I don't know yours
14:41You don't know mine
14:42That's true
14:43But
14:44I'm not the head of state
14:45And
14:46I'm not the head of state
14:47And
14:48I don't know what the king's
14:49Investments are
14:50Private investments
14:51I don't know yours
14:52You don't know mine
14:53That's true
14:54But
14:55I'm not the head of state
14:56And neither are you
14:57Sadly
14:58Yes
14:59But there's an important point there
15:00Which is that the king
15:01Is not a normal
15:02Individual
15:03Like you or I
15:04He's the monarch
15:05He has great influence
15:06Over the running
15:07Of the government
15:08And
15:09Anyone else in a public role
15:10We have
15:11You know
15:12Laws
15:13Guidebooks
15:14Codes
15:15Prime Minister
15:16Has to disclose
15:17All of his properties
15:18His shareholdings
15:19Any other interests
15:20That might influence
15:21His decision-making
15:22Might influence how
15:23He performs his role
15:24None of that applies
15:25So how do they justify
15:26Striking out laws
15:28That they don't want
15:29To affect them
15:30I don't really know
15:31In all honesty
15:32Because we've asked them this
15:33And again we can't get a straight answer
15:34Out of them
15:35We put this to the palace
15:37And they said
15:38Such claims are misleading
15:40They went on to say
15:41That the publication in question
15:43Was given thorough assistance
15:44Background information
15:46And an on-the-record response
15:48In relation to their many inquiries
15:50On the issue
15:51Of crown exemption
15:59The Royal Family are peculiarly bad
16:00Explaining almost anything
16:01The mask of
16:04The mask of
16:05Have you come far
16:06What do you do
16:07How delightful
16:08Slips when people say
16:10How much
16:11How much money
16:12Have you got
16:13Which bits of this
16:14Is our money
16:15What's yours
16:16There is a feeling of
16:17This is incredibly
16:18Ungrateful of people
16:19You know
16:20It's a terrible life
16:21I'm living on your behalf
16:23Can't you leave me alone
16:24Can't you leave me alone
16:25There's a sort of
16:26I do think they feel
16:27At a certain point
16:29This is all very impertinent
16:31Is their wealth
16:33A stumbling block
16:34To their popularity
16:36Definitely
16:37I think so
16:38They're living in the height of luxury
16:40They have no financial worries
16:43They have no worries
16:44Of any ordinary person
16:46So of course
16:48It is a stumbling block
16:54The whole question of money
16:57Was something that
16:58We always had to be
17:00Extremely sensitive about
17:02There is an unwritten
17:03Compact
17:04I think
17:05Between people
17:06And monarchy
17:07That in return
17:08For the royal family
17:10Being royal
17:11Living in palaces
17:12Having a heads of state
17:14To visit
17:15There is an understanding
17:17That there should be
17:18An attention to detail
17:20An excellence
17:21That there shouldn't be
17:23Drop catches
17:24But one can't stand still
17:26One has to be sensitive
17:27To public mood
17:29You used the word
17:30Drop catch
17:31I was wondering
17:32Which catches were dropped
17:33I was thinking
17:34Of the fire
17:36The response to the fire
17:37I think it came as a
17:38Shock to everyone
17:39That the government
17:40Would be paying
17:41For the restoration
17:42Of Windsor Castle
17:48Members of the public
17:49Have raised the question
17:50Of who should pay
17:52As the smoke cleared
17:55Around Windsor Castle
17:57The outcry
17:58Over the repair bill
17:59Totalling 36 million pounds
18:02Meant that something
18:03Would have to change
18:05How is it that
18:06Suddenly we can find
18:07Any amount of money
18:08Where under the same week
18:10Where you've got
18:11Cardboard city
18:12How to which you're
18:13Falling apart
18:14And people being dispossessed
18:15How can you justify that?
18:17Faced with public anger
18:20The Queen stumped up
18:21Some cash
18:22A couple of million pounds
18:24Just a fraction
18:25Of the total
18:26In addition
18:27She opened Buckingham Palace
18:29To the public
18:30For the first time
18:31Oh for eight pounds
18:32A ticket
18:33But the effect
18:34Of the controversy
18:35Over Windsor
18:36Was to shine a light
18:38On the whole business
18:39Of royal finances
18:43And then the Queen
18:44Made another surprising
18:45Announcement
18:48This time
18:49About tax
18:51Historically
18:53The monarch
18:54Would not be taxed
18:55Because they're the ones
18:56To spend all the money
18:57The monarch had to pay
18:58To fight wars
18:59The monarch had to
19:00You know
19:01Pay for a standing army
19:02And so on
19:03And so on
19:04And so on
19:05Right from King John
19:06And Magna Carta
19:07Of course Parliament
19:08Took over paying
19:09For all of that in the end
19:10And income tax
19:11Was introduced
19:12To help foot the bill
19:14When it was
19:15It seemed
19:16Perfectly natural
19:17For the monarch
19:18To pay up as well
19:24Queen Victoria for instance
19:25Paid income tax
19:28Edward VII
19:29Paid income tax
19:31George V
19:32The Queen's grandfather
19:33Paid
19:35They all coughed up
19:38It made a really important
19:39Statement of
19:41A monarchy
19:42That understood its people
19:43And wanted to be
19:44Shoulder to shoulder
19:45With them
19:49But within weeks
19:50Of taking the throne
19:51The Queen's father
19:52George VI
19:53Managed to persuade the government
19:55Managed to persuade the government
19:56That the costs of being king
19:57Were so high
19:58He shouldn't pay tax
20:03And the Queen
20:04When she came to the throne
20:05Simply carried on
20:06This income tax free
20:08Arrangement
20:09That her father had made
20:10Almost as if it was
20:11Some kind of
20:12Ancient royal tradition
20:14To the point that
20:16The Chancellor of the Exchequer in the 50s said
20:19Well of course the Queen doesn't pay tax
20:21It's perfectly natural
20:24And so for decades
20:25The Windsor's wealth grew unchecked
20:31But now with public anger over the Windsor fire dominating the headlines
20:36The fact that the Queen didn't pay income tax only made things worse
20:42I like Queen Victoria have always been a believer in that old maxim
20:47Moderation in all things
20:56Just days after the Windsor fire the Prime Minister John Major made a surprising announcement
21:02Though perish the thought the fire had anything to do with it
21:09Her Majesty some months ago asked me to consider the basis upon which she might voluntarily pay tax
21:16The Prince of Wales has made a similar request
21:18For the first time since the 1930s a British monarch is to pay income tax
21:23It's estimated that her bill will be around £2 million a year
21:27Certainly it's very hard to resist the conclusion that it is a response to the public clamour
21:31Will it be enough to buy off the rising tide of criticism?
21:38By then I'd been in the palace for five years
21:42It was a time where I think a lot of questions were asked about the monarchy
21:48The wealth of the institution, the whole question of tax
21:53These kinds of events cause you to think about what you're doing
21:59It was rather suspicious it was announced days after the fire
22:03Well, suspicious to the extent that a lot of the work had been done before the fire
22:09But it needed a catalyst to ensure that it was brought into effect
22:14In plain language, without the fire, it might never have happened
22:24Charged with making sure the new arrangements wouldn't hit the royal purse too hard
22:29Was one of the best money men in the business
22:33The Queen's Director of Finance
22:36Michael Peat
22:38Is Her Majesty pleased that this has happened?
22:41Her Majesty is a very pragmatic person
22:46She appreciates that there was a general feeling that she should pay tax
22:51And she was conscious of that
22:53Michael Peat was an accountant, great grandson of one of the founders of what became KPMG
22:59The P stands for Peat
23:01He helps persuade the Queen that it would be a good idea to pay tax
23:04Can you say by how much Her Majesty will be worse off?
23:07Not in precise terms, what I can say is that she will very definitely be worse off
23:13I mean, these are real arrangements and myself and my colleagues on the financial side
23:18Are going to have to work hard to enable these new arrangements to be paid for
23:23One of the arguments he puts forward is that there actually wouldn't be much material change for her
23:28They were able to convince the Treasury that some of that cost, including the cost of running some of her private residences, were put against tax
23:42As legitimate official expenses
23:44So really the Queen was an astute tax avoider
23:48Absolutely
23:50Do you think this new arrangement is fair?
23:53Yes, I think it's very fair
23:55If I could just add to that, it's fair insofar as tax is fair for any of us
24:00Mr Peat, thank you very much indeed
24:02Thank you very much
24:03The trouble with gestures, like suddenly announcing you're going to pay income tax, voluntarily
24:12Is to make everybody inquisitive about, you know, what taxes you do and don't pay
24:18I mean, it sparks in its own way a controversy
24:22Do you pay capital gains tax?
24:25Do you pay inheritance tax?
24:27We all do
24:29Inheritance tax? No, nothing, nada, zilch
24:33Absolutely nothing
24:35Generation to generation, the wealth passes, unmolested, any other family
24:40As it goes through the generations, the wealth is winnowed back
24:44Not so with sovereign to sovereign bequests
24:47There is never a moment at which it gets sliced down
24:49So they just get richer and richer and richer?
24:52And they're exempt from capital gains tax
24:54Who says?
24:56That's by agreement with the government
24:58But the position now is that they voluntarily pay
25:01Is there any prospect of their taxation position being reviewed?
25:06All of these things can be changed if the government wants it
25:09But there's a kind of culture of deference, I think
25:13It's very difficult to open that discussion without being perceived as the government of the day
25:17To have got some sort of problem with the monarchy, or to be starting a fight with the king
25:22It's the absurdity of situations where there is so much wealth and so much privilege in the sense of exemptions from taxation
25:35Why does he need that money?
25:38And I think it's surprising that those questions haven't been asked more loudly, certainly since the late queen died
25:47It's often felt in recent days that a veil of sorrow has covered the nation
25:52So when the queen died, Charles made an inheritance tax saving on assets alone
26:05Of hundreds of millions of pounds
26:08Alongside their tax-free inherited wealth, the monarch and the heir also benefit from a huge private income
26:22Generated by two historic estates, which boast special tax exemptions
26:27The Duchy of Lancaster and the Duchy of Cornwall
26:32The Duchy of Lancaster and the Duchy of Cornwall
26:37And the profits made from the Duchy of Lancaster go to the king
26:41And the profits from the Duchy of Cornwall to the Prince of Wales
26:45That's to say to William
26:46Their Majesty spent much of their time in informal visits to the Duchy of Farms
26:51Many of the tenants on the Duchy estates had the pleasure of talking with their royal landlord
26:56These names are a wee bit misleading because these estates are actually vast
27:02Lancaster includes tracts of land spread across the whole north of England
27:07While Cornwall is even larger with holdings across 23 different counties in England and Wales
27:16And both of them have areas of prime real estate in central London
27:26In every film you watch about the duchies, the Windsors are portrayed as benign landlords
27:34The wonderful thing about the Duchy of Cornwall has always been that family association
27:40Going back all these generations
27:42Champions of local economy
27:46We still have some farms going back to 1337
27:50And heritage biscuit bakers
27:53Now you can find duchy originals in all branches of Waitrose
27:58But that's never been the whole story
28:01Thank you ladies and gentlemen for paying your rent every now and then
28:05When Charles first became Prince of Wales it was quite a sleepy rural backwater in a sense
28:16It was all about rural properties and the rents and so on that you get from them
28:21In the 1980s that started to change
28:23The Thatcher government introduced legislation so the duchy could invest more freely
28:31In the early 2000s, Charles persuaded Michael Peet to cross the Mall to Clarence House to go and work for him
28:42Why?
28:43It was put to me by someone who knew Charles well that he wanted to get more money out of the duchy of Cornwall
28:50He wanted the duchy to be more efficient
28:52In the years that Michael Peet was there it changed its tack and it started moving away from rural properties and residential properties to commercial property and became basically a very successful commercial property firm
29:11But of course not treated like an ordinary company because of the anomalous tax regime
29:17So the income that Charles got from the duchy shot up
29:22The duchy's success didn't go unnoticed
29:26The ever-increasing sums paid out to the Queen and Charles caught the eye of Parliament
29:33And the men who handled the royal money were summoned for questioning
29:37Today for the first time in history MPs were able to question household officials on the duchy's accounts
29:44There's some irritation among Prince Charles' senior staff at this latest attempt to call his financial arrangements into question
29:51This afternoon the Public Accounts Committee is looking at the accounts of the duchies of Cornwall and Lancaster
29:58The committee tried to figure out why the duchies shouldn't play by the same rules as everyone else
30:08It's not taxed in the same way the PLC would be taxed with corporation tax, is it?
30:13The duchy of Cornwall, like the duchy of Lancaster, is exempt from the taxes
30:19Do you want to give us an explanation for that?
30:22Erm...
30:25Well, I mean, these are matters of policy, really
30:30At the end of the year, the profit, that all goes to the Prince of Wales
30:34That's exactly the purpose that we exist for
30:36How much is that?
30:39Last year it was £11.9 million
30:41Can we have a report on the list of properties?
30:44I don't see why
30:45No, no, I know you don't see it, but I'm asking you, can we have it?
30:48I don't, I don't think it would serve any better...
30:51No, no, you don't know that, you don't think that, but I do
30:54And I'm asking you a yes or no, will you make available a list of the properties?
30:58I mean, are you refusing to do so?
31:00Well, I'm not saying no, but I still need to persuade you there's a good reason to do so
31:03If you're not saying no, you're saying yes then
31:05I mean, it's a simple yes-no question
31:07I'm leaving the question unanswered, because I can't see the purpose of itself
31:10These MPs grandstanded
31:12They huffed and puffed, but they didn't land a glove on them
31:19Charles gets a lot richer because the Dutch is producing more profit
31:25Yeah, absolutely
31:29In the years since, the Dutch's portfolio has continued to grow
31:33Office blocks, service stations, shipping terminals, even two small towns, all filling the royal purse
31:45It's only when you come here that you can really start to describe what the principles are
31:49Prince Charles managed to scrape by on 16,273,000 last year, an increase of a million, and he managed to pull off the feet of increasing his income, but decreasing the tax he pays
32:03He loves them to spend it
32:09Everyone knows that he's got a taste for luxury, so
32:13Partly it goes on his lifestyle, but also he loves to do things, he wants to change the world
32:19So he had an enormous staff, people running his charities and so on
32:22We want to be able to make a difference on the ground, how do we do it?
32:28Whatever Charles' charitable instincts
32:33Journalists recently uncovered confidential details that revealed
32:39Sometimes charity comes at a price
32:41A really interesting story, this is the Dutchie Files, an investigation by the Sunday Times and Channel 4 Dispatches
32:51Revealing full details of the vast ancient estates owned by the King and the Prince
32:57I think the word here is revelation, isn't it?
33:00The Dutchies generate profits
33:01By charging the army, the navy, hospitals, the prison service, schools and councils for the right to use lands, rivers and seashores seized for the Dutchies in medieval times
33:17A spokesperson said it is a private estate with a commercial imperative
33:21The Dutchies imposed levies for the right even to dig graves
33:25It was exposed, there is all these other ways in which taxpayer money gets funneled towards these people
33:33The King gets £11 million over 15 years
33:39So that the NHS can rent a warehouse that it uses to store ambulances
33:45Prince William gets £1.5 million every year from Dartmoor prison because it's on Dutchie land
33:51That is a huge amount of money flowing from the public purse into the private pockets of the royal family
34:01£11 million could do all sorts of things for the public good
34:06Instead it's making a king even richer than he already is
34:10There was perhaps a whiff of hypocrisy about this
34:13Not just because it was making the king richer
34:18But because the royal family often demonstrates their support for the NHS
34:24Let's go to the calls
34:28It's a usual robbery for the British citizens
34:31Cathy from Lancashire, what do you think about this whole rent row in the royal family?
34:36At the end of the day, he doesn't need the money
34:38The more they get, the more they want
34:39We don't want a monarchy that runs everything as though it's a commercial enterprise for profit
34:46How would you have handled the row about the Duchess charging the NHS
34:55Or charging for the army to use Dartmoor to exercise on?
34:59I think it's very important to understand what the Duchy of Cornwall is
35:03It's a private estate, and Charles as Duke of Cornwall, and now William as Duke of Cornwall, ran it successfully as a business
35:13If we're trying to say, because they're owned by a member of the royal family, they should give their land away for free
35:20That sounds very naive to me
35:21The palace did seem to be embarrassed because they announced they would review some of the arrangements
35:29Though they did say their management act required market-based arms-length relationships with all public bodies
35:37We've come a long way from the days of the early 1950s
35:47Today, the two Duchess taken together provide the Windsors with a private income every year of £50 million
35:55Is he aware and maybe embarrassed by the luxury of his life?
36:06No, I don't think he's embarrassed by it
36:12And I think he knows how lucky, I mean I'm absolutely sure he knows how lucky he is
36:16And he does have a very, very strong sense of duty
36:19Yes, please, if you don't mind, sir
36:22But the Windsor's inheritance doesn't just come from land seized and exploited here in Britain
36:30It springs from our history as a great imperial power
36:36The history, of course, is very fascinating that it belonged to so many of the kings of Persia
36:44The Queen talks with obvious warmth about this jewel
36:49Queen Victoria was sent in from India, it's rather fascinating, I think
36:54It would be nice if one could go on wearing it, I think
36:57You wouldn't know it from this film, but it's just one of many trophies
37:01That come from Britain's long history of colonial conquest
37:05One of the smallest countries on the map is responsible for the mightiest commonwealth of nations in history
37:10For 400 years since the first Queen Elizabeth, our monarchs acquired huge amounts of wealth from the empire
37:19Those early pioneers have left us a great inheritance, of which we may be justly proud
37:23For might and right go hand in hand
37:25They've dealt in precious metals, in opium, in textiles, in tea and tobacco, in sugar and spice
37:35And in human beings
37:37The fact is that a certain amount of the royal family's wealth came from the transportation, kidnapping, rape, murder of Africans
37:50That was transatlantic slavery
37:51British society as a whole benefited from slavery
37:55Absolutely
37:56It wasn't just the king
37:57I think everyone benefited from it
37:58But I think increasingly historians are proving that the royal family pioneered the slave trade
38:03I mean the Royal African Company set up by Charles II and his brother James ran the monopoly of British slave trading at that time
38:13So the crown had a monopoly on the slave trade
38:16Many royals fought abolition and argued for the pro-slavery lobby
38:22So it actually was a family business for the royal family
38:26You could absolutely describe the Royal African Company as a family business
38:29And when its enslaved cargo arrives in places like Barbados
38:35They have the initials of the Duke of York
38:38The brother of Charles II, branded into their flesh
38:45Like so much to do with royal finances
38:48The details of the monarch's involvement in slavery are very rarely discussed
38:53The Queen never publicly mentioned the slave trade
38:56Or the royal connection to it
39:00She did however attend a service to commemorate the 200th anniversary of its abolition
39:07The congregation in Westminster Abbey included representatives of all countries
39:15Who had been victim of the slave trade
39:18I was invited as a member of the press to report on it, to record this ritual
39:22It was about 2,000 people
39:23A lot of politicians, the prime minister, the royal family
39:25A glorious day, a glorious day for, not a commemoration but also let's remember, a celebration
39:42As a member of my community, I wanted them to say, look, as institutions that were involved and profited from this and still reap the benefits
39:52We're sorry, we shouldn't have done that
39:55But it was very patronising, the drums, the horns
39:58I think this is going to be a unique service in many ways
40:02Not just because of who's here
40:04Descendants of slaves, of abolitionists
40:06Perhaps even, who knows, of traders themselves
40:10The Queen walked past me
40:12I was kind of reading through the programme about all the things we had to do, the actions
40:18It didn't have the solemnity, it literally was a celebration
40:21Welcome in the name of Christ, who sets all free
40:25And there was a point where I was supposed to kneel down and pray to God and say sorry for slavery
40:33And it's horrific
40:41All the hymns are happening and I'm looking around and I'm like, oh my gosh
40:45And it's coming to this point
40:47And it's like a time bomb for me
40:50Today it is for us to face our history
40:53And I'm like, I can't do this
40:56Let us therefore confess our sins
40:59I got up
41:01In penitence and faith
41:03To our gracious Father
41:05I had my hands up
41:07What I said is not in my name
41:10And forgives
41:13Quite a bold thing to do
41:19It's a human thing to do
41:21Institutions, the wealth, the assets
41:25Are proceeds of those horrendous crimes
41:32Did you speak to the Queen? Did you address the Queen?
41:34Yes I did
41:36There was no response, she wasn't giving me eye contact
41:40The protester
41:42Being walked out
41:44It is an emotional subject, there's no question about it
41:47Let go!
41:49I think it's back to the service now
41:59Other sins of the father visited on the son
42:01The individuals living in the 21st century
42:05Are not responsible for what the royal family did in the 1600s
42:10But as an institution, they could talk about it
42:14Many institutions with ties to slavery
42:18Universities, museums, even the church
42:21Have responded in some way
42:22And Charles, and later William, have expressed regret about slavery
42:28In general terms
42:30I strongly agree with my father
42:33Who said in the appalling atrocity of slavery
42:36Forever stains our history
42:38I want to express my profound sorrow
42:41Slavery was abhorrent
42:44And it should never have happened
42:46As King, Charles has said he's deepening his understanding of it
42:53But no one in the family has gone into any detail
42:57About the direct role the monarchy played
43:00Or the fortune they made
43:03I think the biggest problem is that
43:06Royal family don't acknowledge their own history
43:09They should embrace the complexity of their imperial history
43:15You know, we are a country that is defined by the history of the British Empire
43:20It's the biggest thing we ever did as a country
43:22And yet the royal family don't talk about it
43:24Rather than being a history that divides us
43:27They could talk about it in a way that unites us
43:38Uniting the country is of course the monarch's job description
43:42The bread and butter of being king
43:45And it means a never-ending series of royal engagements
43:51Today, he's in Bradford
43:55Where news of his arrival draws excited crowds
43:59She'd like to marry George, wouldn't it?
44:01No!
44:03She wants to marry George?
44:04No!
44:05She wants to marry George
44:06I never said that, Mum
44:08Marry George, you'd be queen
44:10Yeah!
44:12There's an idea of it
44:13As you'd expect, the royals don't have to pay for days like today
44:25Out of their own pockets
44:27A system called the sovereign grant pays all their official expenses
44:32Which covers almost everything we see them do
44:36From walkabouts, to garden parties, to state banquets
44:40Monsieur le Président, mon épouser moi-même
44:44The system where we give money to the royal family each year
44:48Goes back 200 years to George III
44:51He struck a deal with Parliament
44:54He handed over the revenues from vast swathes of royal land to the government
45:00It was called the Crown Estate
45:02The Crown Estate
45:03And in return for the Crown Estate
45:05The government offered George an annual allowance
45:10A statement to Prime Minister
45:12The amount of that allowance has become the subject of lively debate in Parliament
45:19The government proposes that the annual payment should remain at 7.9 million
45:25The sums paid far exceed the services rendered
45:27The arguments went on here about whether the royal family was value for money
45:33When I see the coronation coach
45:35I want to see it gilded with the finest gold that can be bought
45:38There's no attack in the Crown here
45:40This is how the money is used
45:42An overwhelming number of people in this nation
45:45Regard the royal family as the greatest asset the United Kingdom has
45:49This is a pretty big winter heating allowance
45:52It's all good parliamentary knockabout
45:56But the royal family didn't much enjoy having their accounts poured over
46:01In 2011 everything changed for them
46:10The country was once again in the economic doldrums
46:14A new government had come to power
46:16And there was an eager new Chancellor of the Exchequer
46:20Trying to slash public expenditure
46:23Morning Mr Osborne
46:25George Osborne
46:27Today is the day when Britain steps back from the brink
46:31The figures for cuts are stark
46:3481 billion pounds cut from public spending
46:37Almost half a million jobs to vanish
46:39The deepest cuts to public spending in living memory
46:45A stronger Britain starts here and I commend this
46:48The palace had been badgering the government for a change in the system
46:52Because the palace wanted more control over their finances
46:54That was the palace's idea
46:56Yeah, the palace thought they should get a proportion of the profits of the Crown Estate
47:02Now the Crown Estate is a vast property empire but the government gets all the money
47:06So George Osborne buys into this
47:09Okay, we'll attach it to the Crown Estate
47:13For no particularly good reason
47:15Other than it sounds royal
47:17It sounds good
47:22The way of funding the monarchy has been running for 200 years
47:26Why did you want to change it?
47:28My predecessor Alistair Darling said to me
47:30Look George, I've had to deal with a lot
47:32The one problem I haven't solved
47:35Is the funding of the Royal Family
47:37And that's over to you
47:39And that's when we created a new system
47:41Sovereign Grant
47:43There's a formula that is decided by the Prime Minister, the Chancellor
47:48And a representative of the Royal Family
47:51That essentially sets how much the Royal Family gets
47:54As a percentage of the money that the Crown Estates generate
47:58Now the Crown Estates these days are just a kind of modern property company
48:03Not a bad barometer of how the British economy is doing
48:06Oh really?
48:08You did this at a time when you were imposing austerity on everybody
48:11In this country and were much hated for it
48:15And yet at the same time you attached the amount of money the Royal Family gets
48:18To a huge property company with investments in London and other parts
48:24Which inevitably is going to get richer and richer
48:26I don't think that's fair
48:28If the money starts to get too much
48:31Then the system kicks in and the percentage of the Crown Estates is adjusted down
48:37So when I set the Sovereign Grant up
48:40You know the Royal Family was due to receive 15%
48:44That's been adjusted up to 25% to take into account the rebuilding of Buckingham Palace
48:49And then it's now been cut to 12%
48:52So the formula, a bit like the Royal Family
48:54The formula is flexible and adjusts
48:56But the mechanism the Sovereign Grant endures
49:00At first glance that seems fair enough
49:02A budget that can rise or fall
49:07But not quite
49:09At the heart of it is this fantastic mechanism from the Royal Family's point of view
49:14If the profits of the Crown Estate go up, the Sovereign Grant will go up
49:18But if the profits of the Crown Estate go down, the Sovereign Grant won't go down
49:23Won't go down?
49:25It's a ratchet, it can only ever go up
49:27So the Palace is on a win-win
49:28The actual cash they get, under the system you set up, can never go down
49:34So if they have a bonanza year, their income rises and it never drops again
49:42The higher it goes, the higher it stays
49:45Even if the economy tanks, even if the Crown Estate that funds it all tanks
49:50That was one of the rules you made, wasn't it?
49:54They should never suffer a fall in income, unlike everybody else in the country
49:58Well, they never suffer a fall in cash
50:02That's what people call income
50:04Yeah, but inflation means that that can be a real fall
50:09How can that be fair?
50:10It's better than having an annual decision by Parliament how much to give to the Royal Family
50:17Did the Palace think it was a good wheeze?
50:19Well, I had quite a few conversations with the Queen about it
50:21Not surprisingly, I took her personal interest
50:24And did she purr with pleasure when you explained how it would work?
50:28No, I think at the time it was seen as quite a tough settlement
50:32Didn't turn out that way
50:33In reality, since it was introduced, the percentage may have fallen
50:39But the actual money paid out has just gone up and up
50:44Soaring above the rate of inflation from around 30 million pounds in 2012
50:51To 72 million pounds this year
50:56And if nothing changes, it'll only go ever upwards
51:03Wouldn't you have done better to have had a system where you say
51:07This is what the Royal Family needs in 2012
51:10And we'll make sure it stays level with inflation
51:14Particularly at a time when millions of people in the country are getting poorer and can't make ends meet
51:22I don't agree with you that the system has overly rewarded the Royal Family
51:27You know, it's grand, but it's not overly lavish
51:30Frankly, the money that the public spends on the Royal Family is tiny
51:37By comparison to the things we spend on benefits or the NHS or the defence budget
51:43You know, the NHS budget is, you know, well north of 150 billion pounds
51:49But a million a week is not to be sneezed at?
51:51No, but first of all, it's not money for their own personal expenditure
51:57Second, it's gone to, you know, perform the functions we expect of the head of state
52:02And the palaces where great events of our nation happen
52:06I think you get pretty good value for money as a country
52:08You want some of the grandeur, some of the awe
52:12So that when we throw a state banquet for the visiting American president
52:16There's a little shiver down the spine of the president as we show Britain at its best
52:22Mr. President, Mrs. Trump, it is with great pleasure that my wife and I welcome you to Windsor Castle
52:30Melania and I are deeply grateful to you and Queen Camilla
52:39And if we didn't have them as the head of state, we'd have to have someone else
52:42And, you know, let's imagine we had President David Dimbleby
52:46I can tell you he'd want a nice lavish state dinner and he'd want a big house
52:50And he'd want helicopters that close him around the place and all that
52:53He'd be possibly even grander than the Windsors
52:56And he'd like to have the big lenses
53:02Hi there
53:06How are you?
53:14But there's another argument that's frequently made for the value of monarchy
53:20You can see it on display four times a week outside Buckingham Palace
53:24The sheer fact that we have a royal family actually brings an awful lot of money into Britain
53:31Tourists come from all over the world to see our thousand year history on show
53:37Visits Queen Road in Dr. Prasad's car
53:41Is it an argument for monarchy that it is a net contributor to Britain's GDP?
53:47It's valid and I think it's also, at a very banal level, I think it's economically correct
53:53Britain does extraordinarily well as a tourist destination
53:57And some part of that is probably attributable to that whole idea of royal pageantry and bling
54:04But is it a good defence of monarchy to say it brings in tourism?
54:06No, I'm just being honest, okay
54:09If you gave me as an advertising person that amount of wealth and resource
54:13I could probably find lots of other ways to attract people to the UK
54:17You think if you had the funds the monarchy has
54:19You could spend them better by improving London's nightlife?
54:22It's conceivable that Disney could do a better job than the Windsors
54:27In that, okay, the Disney Corporation manages to get millions and millions of people every year
54:33To visit Orlando in August
54:35Which is effectively a baking hot place in the middle of a swamp
54:39So there are other ways you can attract tourists
54:42A half a billion pound aquarium would probably be pretty impressive
54:44But I don't think every decision in life should be reduced to an economic calculus
54:53And I think the royal family is important
54:56It provides a pretty potent symbol
54:59What you might call an arbitrary but shared focus for our allegiance
55:04In many ways that's what we value them for
55:05Whether you value the Windsor's role or you don't
55:12It's a service that doesn't come cheap
55:16The family firm's financial worries have long been put to rest
55:24And Charles was the first billionaire to take the throne
55:27Our royals have a lifestyle to match the richest plutocrat
55:38And their wealth is only set to grow
55:42As my grandmother said when she was crowned
55:46Coronations are a declaration of our hopes for the future
55:50So what of the future?
55:53I commit myself to serve you all
55:55King, country and Commonwealth
56:00God save the king
56:06At the moment William seems to be a bit secretive about his wealth
56:10Unlike his father
56:13He is refusing to publish his tax returns
56:16Despite this he and Catherine remain hugely popular
56:20The argument for all the financial advantages we give the royal family
56:25Is that it's a price worth paying for the life of dutiful public service lived on our behalf
56:34But their position, their wealth and all the perks that come with it depend on whether they continue to win approval from us, the public
56:49Couldn't the monarchy operate from a two bedroom flat in Wembley?
56:52That monarchy could operate very well from a two bedroom flat in Wembley but no one would be very interested in them anymore
57:00It's our interest in them that keeps the institution alive
57:06Their public image is a royal obsession
57:10But in the image business, when things go wrong, they can go really wrong
57:24If you're born into this position, you have a duty to behave
57:29But what lengths will they go to, to survive?
57:35Now we grow!
57:59I'm working for you
58:24Transcription by CastingWords
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