Britain's Queen Elizabeth Faces Cash-Flow Problems
LONDON — QUEEN Elizabeth II - claimed by some to be the world's richest woman - has an intensifying cash-flow problem.
As she marked her 70th birthday Sunday, emerging details of divorce settlements for her two daughters-in-law - Sarah, Duchess of York, and Diana, estranged wife of Prince Charles - suggested that the British monarch's finances are under heavier pressure than at any time in her 44-year reign.
Analysts say she is having to dip into her personal capital to find the cash to pay for the divorces.
Buckingham Palace spokesmen are preserving their usual buttoned-lip silence, but legal sources aware of the terms of the settlement struck in mid-April between the duchess and Prince Andrew say the queen will have to stump up 2 million ($3 million) of her own funds. Of this, 1.4 million will be held in trust for the Yorks' two daughters, with the rest for the duchess's own use.
The Yorks' divorce was granted in mid-April and will become final by the end of May. Andrew - an officer in the Royal Navy - has no personal fortune of his own.
The current pile-up of calls on the royal purse comes on top of an estimated 40 million repair bill for Windsor Castle, heavily damaged in a fire two years ago, and the queen's decision to pay the stipends of minor members of her family instead of relying on the state, as in the past. The Windsor Castle bill is being defrayed to the tune of about 3 million a year by tourists who pay to inspect the state rooms of Buckingham Palace in the summer months.
Meanwhile, a constant squeeze on the monarch's finances is her agreement from 1993 to pay taxes on her private fortune.
Really worrying the queen's financial advisers is the impending divorce settlement between Charles, the heir to the throne, and Diana. The Princess of Wales, whose clothes bill and general lifestyle were described with typical English understatement, by one Buckingham Palace courtier as "rather expensive," is reported to be demanding a final settlement of 10 million to 15 million.
Part of that sum will come from the Prince of Wales out of the income of the Duchy of Cornwall (the main source of his personal wealth). The queen will have to provide the rest.
The duchy consists of extensive estates in the west of England that yield rents and farm profits.
In earlier years, the queen could have siphoned off cash from her own Duchy of Lancaster, in the north of England, to help pay for the two divorces, but that is no longer possible. Profits from the Duchy of Lancaster now are used to pay stipends to lesser members of the queen's family, including the Duke of York and his unmarried brother, Prince Edward.
In earlier years, a government fund - the Civil List - supported the queen's family financially, but under a deal with Parliament the Civil List is earmarked to cover the official running expenses of the monarchy.
The government is under no obligation, legal or moral, to help the queen pay to sort out the marital problems of her children. If it made any attempt to do so it would run up against a widely held belief among members of the British public that the monarch has almost limitless funds.
There is much disagreement about how wealthy the queen actually is. Estimates of her personal fortune have run as high as 6 billion.
The latter figure was claimed some years ago by the American business magazine Forbes, which said the queen was the fifth richest person on earth. The figures were hotly denied by Buckingham Palace officials.
Confusion arises because many mistakenly believe the queen owns her six palaces, vast collection of paintings, and other royal "possessions." In fact the bulk of these properties belongs to the state.
According to the latest estimate, published in London's Observer newspaper, the queen's working capital is around 50 million, yielding some 2.5 million a year.
To fund her children's divorces and meet other cash demands, Elizabeth is having to deplete her working capital, reducing her annual income.