E. Windsor & Sons?

The Royal Family is debating a new role, but just who will pay the piper - and call the tune?
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"The biggest privatisation of them all" was how one commentator described it yesterday. What remains unclear today is whether privatisation of the Royal Family would leave it wealthy, like BT, or broke, like BR.

While four of the five main proposals to take the royals into the 21st Century - allowing eldest daughters to succeed to the throne; removing the monarch as head of the Church of England; allowing the monarch to marry a Catholic, and reducing the size of the Royal Family - would meet little resistance, the fifth is not so simple.

That proposal, apparently under discussion within a private forum of Royal Family members and advisers, would involve renouncing the pounds 7.9m Civil List payment, in return for the income from the Crown Estates, surrendered by King George III in 1760.

A bargain? On the face of it, not for the taxpayer. According to the 1995/96 annual report of the Crown Estates commissioners, income from the land and property they administer - some of the most expensive pieces of real estate in the country - amounted to pounds 94.6m. However, the latest estimates of the costs of running the Royal Household, its palaces and staff amount to about pounds 80m.

If, therefore, the privatisation analogy were taken to its conclusion, the royals could well be in for a bumper dividend.

The Palace refused to discuss specifics of the talks, revealed yesterday by the Sun newspaper, but one Buckingham Palace source said the financial changes, if approved by Parliament, could result in a radical loosening of the Crown's dependence on government.

At present, the cost of the Royal Family is spread across a number of government departments. They pay for everything from security to the cost of the Royal Flight and - until recently - the Royal yacht, Britannia. Included is the upkeep of Buckingham Palace, Windsor Castle, St James's Palace, Clarence House, Kensington Palace, Marlborough House, Hampton Court and Holyroodhouse in Edinburgh. The Queen pays for Balmoral and Sandringham.

However, if the income from the Crown Estates were returned, the taxpayer could no longer be expected to pay for the royal excesses. "It seems obvious that the sums are still being worked out," said one royal source. "But if the deal is that they get all the Crown Estates income back in return for standing on their own feet, you can expect to see them having to pay for the palaces. Who actually gets to keep them - the royals or the state - is another argument."

Dr David Starkey, lecturer in history at the London School of Economics, said we might expect to see the royals selling themselves harder, like many struggling landowners.

"This would make them more like any other noble family, living off its estates. It would be a monarchy which becomes more like Alton Towers or the Lions of Longleat. It is going to have to flog itself very hard."

But there is a constitutional element, too, according to Vernon Bogdanor, Professor of Government at Oxford University. He said: "Sir Frederick Ponsonby, Keeper of the Privy Purse for George V, once said: 'It is an essential part of the Constitution that the Sovereign should be dependent on Parliament for the Civil List and should not receive money directly from Crown lands.'

"Those comments were based on the view that the monarchy should be dependent on Parliament so it couldn't do anything awful. However, there is a danger now that the monarchy could become too close to government. If, for example, John Major failed to get an overall majority at the next election. The other two parties might be able to form a coalition government, but Mr Major might ask the Queen to dissolve Parliament so he can call another election. In that instance, it is better for the Constitution to have an independent monarch who would refuse."

So, would the monarchy look radically different? Lord Blake, the Conservative historian, who has offered advice in the past at the request of the Queen - though not in this forum - thinks not. "To all intents and purposes, most people would see no difference," he said.

Some observers believe the sex and religious discrimination reforms will endear the Royal Family to many who had begun to lose faith in it. But they also feel the financial changes display a realisation within the royals that the writing is on the wall.

It may be that the Queen feels the 21st century will end with Britain as a republic. If so, perhaps she considers the time is ripe to reclaim the family silver.

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