The duchies of Lancaster and Cornwall are two vast property empires that generate private income for the monarch and the monarch’s male heir respectively.
The Guardian has revealed how the money drawn from them by Queen Elizabeth II and Prince Charles soared in recent decades: the pair have extracted the equivalent in today’s money of £1.2bn from the estates over the last 70 years.
The new heir to the throne, Prince William, as the Prince of Wales and the Duke of Cornwall, can expect a similar income. There is little transparency about how duchy money is spent. Buckingham Palace insists the duchies are “private” estates, and the current UK government agrees.
But for centuries a debate has raged over who really owns the duchies, and who is entitled to their profits: the royals or the people.
Cost of the crown is an investigation into royal wealth and finances. The series, published ahead of the coronation of King Charles III, is seeking to overcome centuries of secrecy to better understand how the royal family is funded, the extent to which individual members have profited from their public roles, and the dubious origins of some of their wealth. The Guardian believes it is in the public interest to clarify what can legitimately be called private wealth, what belongs to the British people, and what, as so often is the case, straddles the two.
1265
The origins of the Duchy of Lancaster go back to the late 13th century and a revolt by feudal lords seeking to limit the powers of the king and gain some representation. When Henry III defeated the revolt in 1265, he seized lands of the leading rebel, mainly in the north of England, and gave them to his second surviving son, Edmund. The Lancaster estate was passed down through Edmund’s line, and his grandson was made the first Duke of Lancaster in 1351.
1337
The Duchy of Cornwall was created by King Edward III for his son in a charter, or legal declaration of rights, which asserted that each future Duke of Cornwall would be the eldest son of the monarch and male heir to the throne, and would enjoy income from the duchy estates but would not be able to sell its assets. The lands making up the Duchy of Cornwall were concentrated in the south-west of England. Although the law of succession changed in 2013 to give sons and daughters equal rights to the throne, the Duchy of Cornwall has not kept pace; today, only male heirs can inherit it. When there is no heir, the duchy revert to the monarch.
1399-1485
Henry IV established by charter in 1399 that the Duchy of Lancaster was tied to the crown as the private property of the sovereign. A further charter created by Henry VII in 1485 asserted the monarch’s right to the Duchy of Lancaster as property separate from other crown lands, which would be passed down to heirs as a separate inheritance.
1649
The royals’ legal claim to the duchies, based on earlier charters was, briefly but dramatically, broken in the 17th century. The English civil wars between royalists and parliamentarians led to the overthrow of the monarchy and the execution of Charles 1 in 1649. The duchies and crown lands were seized by Oliver Cromwell, and a fire sale of their assets commenced to raise money for the new commonwealth. It was a brief interregnum when royal wealth was transferred to the nation. Parliament passed an act prohibiting the king’s heirs from holding crown property, overturning the status of duchies as private inheritance. But the duchies were back in royal hands 11 years later, after the restoration of the monarchy with Charles II.
1760
In a landmark settlement, George III agreed in 1760 to surrender the main source of royal wealth – his income from crown lands – to the state. In return, parliament agreed to fund the royal household with an annual payment, known as the civil list, and relieve the monarch of the national debt and the cost of government. The Duchy of Cornwall was excluded from the deal and the Duchy of Lancaster was not mentioned at all, perhaps because the income from it was so small – it had been nearly bankrupt for most of the century, thanks to previous monarchs selling its assets or granting leases for political favours.
1830
William IV became king in 1830 at the age of 64 and at a time of political unrest. Radicals were demanding parliamentary change to widen the franchise beyond a small landed elite and to give representation to the new industrial cities. The cost of the crown became one focus of dispute. The king made a speech surrendering “all his hereditary revenues” to the state. The Whigs, the main opposition party, which favoured parliamentary supremacy, argued that this should include the revenues from the two duchies. The sale of the Lancaster estate would “greatly benefit the public income”, its leading member told parliament. The row over the civil list and political change brought down the Tory government. Once in government, however, the Whigs agreed to a compromise: in exchange for the king’s support for the Great Reform Act of 1832, the civil list would be approved and the royals could keep the duchies.
1837
With a young queen, Victoria, acceding to the throne, the monarch’s claim to the income from the duchies was the subject of fierce debate in parliament once more, with the chancellor of the exchequer and many other MPs wanting the money to go into the public purse. The Whig opposition called for “the right of parliament to inquire into and to appropriate the revenues of the Duchy of Cornwall and the Duchy of Lancaster”. There was no need “to enter into the ancient history of this property”, MPs were told, because the highest legal authority in the land, the previous lord chancellor, had recently “stated that he considered these revenues to be public property”. Opposition MPs said “every other branch of the hereditary revenues of the crown had been given up” and the duchies were only excluded on account of “some barbarous feudal rights which people chose to connect with the subject”.
1838
The palace managed to argue there would be no saving to the public purse in taking the duchy revenue, but to satisfy its critics the Duchy of Cornwall and Duchy of Lancaster Act was passed, enshrining parliament’s right to scrutinise the duchies’ accounts each year. The duchies were arguably private but public at the same time – an ambiguity that succeeding monarchs would work hard to preserve.
1865
A parliamentary committee looked at whether duchy profits had become excessive and should be given to the Treasury. The then prime minister, Earl Russell, and the chancellor, William Gladstone, supported the inquiry, but the queen made her opposition clear and the matter was not pursued. Before his death in 1861, the queen’s consort, Prince Albert, had managed the duchies more efficiently than in the past, increasing their income dramatically. A few MPs raised questions in later years about savings made by the queen from the civil list being absorbed into private royal wealth. One told parliament that “in a limited monarchy, for the reigning family to become possessed of a large private fortune, is a constitutional danger of the first magnitude”.
1901
Edward VII became king and in the now customary tussle over the duchies, the government considered whether they should be absorbed into the crown estate, which was, in effect, operating as a revenue-raising division of the Treasury. The move was again successfully resisted by the palace.
1910
George V, like his predecessor, fought off challenges to the duchy income. He also persuaded the Treasury to let him off paying income tax on it, in a deal under which the king paid for the costs of visits from foreign heads of state.
1936
The country was in the grip of the Great Depression and mass unemployment when Edward VIII acceded, and the royal family’s wealth came under renewed scrutiny. The leader of the opposition, Labour’s Clement Attlee, introduced an amendment to the civil list bill calling for the royal surrender of the duchies in exchange for an adjusted annual sum of money tied to the actual cost of royal functions. The duchies were “historic survivals and cannot be considered in any way to be private estates”, he told MPs. “It is extremely undesirable that the personal income of the sovereign should be in any way derived from kinds of property that are liable to come into controversy.” The amendment was defeated, 202 to 95.
1971
MPs reviewed the royal finances via a select committee. Treasury documents show officials recommended that the cabinet discuss whether they agreed with the crown that these revenues were really “inviolate”, meaning their status could not be changed. However, with industrial relations deteriorating, it was not a government priority. Early the following year, the republican Labour MP Willie Hamilton introduced a private member’s bill to nationalise the duchies and the crown lands. It was defeated, but more than 100 MPs supported it.
1989
An official Treasury group on the future of the civil list was set up to “establish the full cost of the functions carried out by the head of state” and assess “the various sources of income available to meet such expenditures”. Minutes in the National Archives, marked “confidential”, reveal that the idea of replacing the civil list was discussed, and the status of duchy revenue was questioned, but it was defended by the palace. The group nonetheless asked: “assets include the incomes of the duchies … how are these to be treated in the future?”
2005
The public accounts committee, chaired by the Conservative MP Sir Edward Leigh, reviewed the duchies. One of their recommendations was: “There should be an assessment of how well the surpluses of the two duchies correspond to the respective needs of the households of the queen and the Prince of Wales. The current arrangements stem from the 14th century, and the resulting income is to that extent an accident of history. After more than 600 years, it would seem sensible for the Treasury to review whether these arrangements remain appropriate to present-day circumstances.”
2011
The prime minister, David Cameron, and his chancellor, George Osborne, introduced legislation to replace the civil list for funding the royals with a new system, called the sovereign grant. The royal household was awarded an amount from the Treasury equivalent initially to 15% of the annual net revenues from the crown estate. The money came from the exchequer, but the deal linked royal funding to the £16.5bn estate their ancestors had surrendered 250 years earlier. Osborne effectively removed the duchies from debate, telling MPs: “It is a long-established principle of the system that their private finances, for example, from the duchies of Lancaster and Cornwall, are their private money.”
2017
A huge leak of offshore documents known as the Paradise Papers enabled the Guardian and the BBC to show that the Duchy of Lancaster held millions of pounds in a Cayman Islands fund. The Duchy of Cornwall was revealed to have invested millions of pounds in offshore funds and companies, including a Bermuda-registered business run by a friend of Prince Charles. The palace briefed that offshore investments had been exited by 2019.
2022-23
The queen’s death triggered an immediate switch in ownership. The Duchy of Lancaster passed to King Charles and the Duchy of Cornwall to Prince William. As male heir, William automatically becomes, at least on paper, a billionaire. Unlike during the accession of so many previous monarchs over the centuries, there is very little evidence of public disquiet or parliamentary rebellion over the now record sums the monarch and heir are extracting from the estates.
Sources: Duchy of Lancaster; Duchy of Cornwall; Hansard parliamentary debates; public accounts committee reports; National Archives; History of the Duchy of Lancaster by Robert Somerville (privately printed, British Library); The Queen’s True Worth by David McClure (Lume Books 2020).
