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The corruption at the heart of the royal household

Andreas Whittam Smith
Monday 18 November 2002 01:00 GMT
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Not least among the revelations following the collapse of the trial of Paul Burrell, the royal butler, is the extent of financial corruption at the royal palaces. The inquiry to be conducted by the heir to the throne's private secretary, Sir Michael Peat, won't look beyond St James's Palace and perhaps Highgrove.

But wherever the Royal Family lives, whether Buckingham Palace, Kensington Palace, Sandringham and the rest, it appears that royal servants are constantly supplying local dealers with royal things for sale. What might these be? Plates, busts, dolls, postcards, photographs, puzzles, uncashed cheques signed by George VI, notes by the two Princes to family and friends, Christmas present tags ("with fondest love – Lilibet"), Christmas cards signed by Charles, chairs, car mascots, menus, books, jewellery and goodness knows what else.

The stuff comes in through the front door, often as gifts to the members of the Royal Family, and goes out by the back door, with some of the loot eventually reaching the United States. It is worth many millions of pounds.

It is inescapable that a forensic inquiry must examine the degree of financial corruption at all the royal palaces and homes. Without exception. Every gift to every member of the Royal Family received during, say, the past 10 years, must now be accounted for – even if the answer is, as appears to have been the case with a carved table given as a present by South Sea islanders, that it was disposed of by bonfire.

To gain a complete picture it will also be necessary for the bank accounts of the recipients and their servants to be examined. And as only the police or a properly constituted tribunal have the necessary legal powers, such a body will have to be used.

A key question is what constitutes an official gift. They are presents received by a member of the Royal Family during or connected with a royal engagement or given to them to mark a special occasion. As such they are the property of the state. What to do with official gifts is well established. Official gifts are recorded and then they may go on display, or be loaned to a suitable body or be placed in storage.

What, for instance, should have been done with the South Sea carved table? Surely it could have been loaned to some worthy institution rather than being burnt as rubbish. Or, to take a second example, an elaborate wooden and wrought-iron garden bench given to Charles and Diana to mark their wedding was, by definition, an official gift. Consequently it shouldn't now be on sale at a dealer's showroom in Norfolk.

According to newspaper reports, the garden bench has a price tag of £12,000. It was apparently in use at Highgrove for many years. What happened then? Did Charles give the unwanted bench to a servant knowing, or even expecting, that it would be sold for private profit? Or did a royal servant steal it?

Let us suppose that it was the first. Harmless enough, perhaps, just an old bench with the letters C and D engraved on the back with an iron heart carved on either side? No, not innocent at all, but evidence of a rotten system.

Furthermore, malpractice now appears to extend to the manipulation of the royal warrant holders. Holding a warrant for the supply of goods to the Royal Family obviously confers a commercial advantage on the firm. It often brings extra sales from tourists or from certain overseas markets. The warrant has to be renewed every five years.

It now appears that the royal palaces use the implied threat of losing the licence to bargain down the price of goods supplied. This in turn suggests that the warrants, widely seen by the general public as a guarantee of quality, may not be that at all, but rather a function of preferential treatment for royal customers. Worse still, it is reported that some royal servants demand substantial discounts from royal warrant holders when buying certain goods for themselves. If so, they are also relying upon the implied threat that the warrant can be removed and using this for their private benefit.

All this fits together. For it has become clear that the Royal Family employs a corrupt method for remunerating its staff. Their actual salary is poor but royal servants are able to go some way to make up the difference either by bringing pressure to bear on royal warrant holders, such as certain London department stores, if they are among the better paid, or by selling unwanted royal goods if they are less fortunate. And none of these extras are declared for tax.

Thus, to go back to the garden bench, although Charles could say that he personally will not receive a penny of the £12,000 it is expected to fetch, that is not the point. The system of giving unwanted goods to servants for selling on means that they will continue to work for low salaries when they might otherwise refuse to do so.

As a result, if the suppositions I have made about the bench were to turn out to be accurate, then we should be faced with the unpalatable fact that the heir to the throne had in effect misappropriated some £12,000 from the public purse. That is the kind of thing which must be examined in even the limited inquiry being carried out by Sir Michael Peat.

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