Recessions provoke criticism absent during the good times. Almost everyone tends to be more forgiving in a boom. Gordon Gecko’s “greed is good” 1980s philosophy was recycled by New Labour’s Peter Mandelson in 1997, announcing that the party was “intensely relaxed about people getting very rich” – the early 1990s recession had been forgotten.
Now, as we enter what may be merely the early stages of a more serious downturn, criticism may return with a vengeance.
Discontent is rising over Britain’s “boardroom bonanza” as executive pay soars while employees are expected to show restraint. Even a senior EU official labelled such high pay “a scourge” and in Germany, legislation now penalises companies with excessive pay differentials.
As inequality increases, some top UK executives now earn £10m-25m a year, but shareholders can check such excess if they wish, and there are signs of this happening. MPs have been criticised for profiting at public expense, financing and equipping second homes with taxpayers’ money, and the system now faces reform. However, this pales in comparison with senior business figures, and MPs’ pay falls well short of that of senior local authority executives and civil servants.
But haven’t we forgotten another tiny minority? A small group employed and subsidised at public expense, which owes its privileged public positions only to their birth; the Windsor family. In particular, the Queen and the Prince of Wales, who enjoy financial returns – official state incomes and accompanying benefits – that positively dwarf even those of the most expense-hungry MP.
Yet, curiously, we seem to overlook this privileged elite, often misunderstanding that their riches derive from the public purse. Elsewhere, it is a maxim that that those in public life should not benefit excessively from their positions. Yet the Queen grossed over £12.5m this year (£11.6m last year) from the Duchy of Lancaster. Few will have noticed the financial report published quietly on the Duchy’s site.
In June this year the Prince of Walesreceived over £16m from the Duchy of Cornwall, up £1m from 2007. These returns and other related perks have already generated parliamentary criticism.
Official expenses are met, and their wealth, helped by past tax exemptions, puts the majority of top corporate earners to shame. Many still believe such wealth is somehow necessary for the “honour” and “dignity” of their role.
It isn’t. Take £100m off their annual cost to the taxpayer and we’d still have the costliest monarchy in Europe. Ruritanian language used in connection with the royal family complicates and confuses. Official incomes for the monarch and the heir to the throne – the latter a position with no constitutionally defined role – derive from the Duchies, yet most people would be forgiven for not realising that these giant estates are in reality public properties. The income may be “private”, but that’s all, they are not personal fiefdoms.
As repossessions rise, banks quake and inflation bites, a sense of unfairness arises as it did in the early 1990s. MPs are forced to trim their privileges to retain public support. What of the Windsors? How much longer before their own fat-cat lifestyles face scrutiny?