The Duchy of Lancaster is what is known as a Corporation Sole or a corporation with a single person as beneficiary. That person is the Duke of Lancaster, none other than Elizabeth Windsor; but gender is the least important ambiguity we shall encounter. The Duchy is also a County Palatine which means it can exercise powers normally reserved to the Government. Herein lies the problem.
Where There’s No Will There’s a Way!
It is a fundamental of English law that all property must have an owner. But occasionally it happens that no title can be established for property, for example when a person dies with no family and not having made a will. Then it is the duty of the Crown (Government) to dispose of the assets. This normally means selling off the asset and passing the proceeds to the Treasury. That is unless you die on land owned by the Duchy of Lancaster (or the Duchy of Cornwall, controlled by the Duke of Cornwall, Charles Windsor). Then your property becomes their property (known as Bona Vacantia). The Duchy’s own site describes it thus:
Whatever remains undistributed from a person’s estate is the property of The Queen in Right of Her Duchy. Gifts may be made, on the Chancellor of the Duchy of Lancaster’s authority, to those who might reasonably have expected to benefit on a deceased’s death.
The Chancellor of the Duchy of Lancaster is someone I shall return to in due course! The proceeds of bona vacantia are then distributed to charity which sounds fine. But remember that the Duchy of Cornwall has the same arrangement and Charles Windsor has been known to give money to his old school chums the exclusive Gordonstoun! Some charity!
Hedge Funds, Interest Swaps and Property Investment
I have blogged before about the disingenuous myth promoted by Buckingham Palace that Elizabeth Windsor is politically neutral. Most certainly this applies to the Duchy of Lancaster which feeds her personal wealth and is anything but neutral. The public image of the Duchy is one of cosy tradition with picturesque images of such assets as castles, hillsides where smiling farmers tend their flocks and babbling brooks feeding placid lakes. But the reality is very different and it is worth taking a look at just one aspect of the Duchy’s activities. Along with an analysis of Hedge Funds and Interest Rate Swap dealings the 2016-17 Report and Accounts mentions:
The portfolio, acquired in September 2016 for £34.25m, comprises four distribution warehouses (Basingstoke, Harlow, Redditch, Alcester) and one industrial estate in Swindon. The Duchy of Lancaster has been steadily building its distribution warehouse network in recent years, acquiring Wardley Industrial Estate in Greater Manchester in 2015 and both Estuary Commerce Park in Speke, Liverpool and Units A and B at Walker Park, Blackburn in 2014.
Bear in mind that this is only one small part of a corporation with over £600 million of assets, But note that unlike a commercial investment and property company the Duchy is not subject to Corporation Tax. In an arrangement which is available to few other individuals Elizabeth Windsor is allowed to voluntarily pay (she has a ‘Memorandum of Understanding’ with the Treasury) income tax on her earnings from the Duchy, though how much she actually pays remains secret. Moreover, it also means that changes in the laws governing warehouses and the employees are of direct interest to the Duchy and may affect its profits. Areas such as health and safety, customs, food storage regulation and planning permission are all relevant, to name but a few. Because of secrecy we are not allowed to discover whether these issues come up in conversation between Windsor and Prime Minister.
Throw in a Murky Chancellor, a spot of Tax Dodging and Secrecy!
The quasi public/private nature of the Duchy of Lancaster highlights much that is wrong with our system. The Duchy exists to provide a personal income for the Sovereign from which Elizabeth Windsor personally benefits.. Yet as a Palatine it takes on various rights and responsibilities of Government. For example, It has its own ‘Attorney General’ the law officer of ‘the Crown’
We have already seen the exploitation of this ambiguity in defining the crown on the issue of tax. It is ‘crown’ from the point of view of levying (or, more accurately, avoiding) tax, but the revenues all go to one individual. A similarly outdated system allows the Windsors to exercise ‘Manorial Rights’ and thus claim any mineral wealth which happens to lie under any property the jurisdiction of their Duchies. The fact that this cannot be challenged is a clear case of domination over people based on archaic principles.
How Donald Trump would love that arrangement! The ambiguous nature of crown is a grossly distorting factor in British Government. Its chameleon like nature, able to take on a form which protects unearned privilege is a rotten heart of our system.
Finally back to the Chancellor of the Duchy of Lancaster. Interestingly it is a post once held by Sir Oswald Mosley just before he formed the British fascist New Party. What does the Chancellor do? As the duties are not time consuming we know he operates as a Cabinet Minister most of the time. But a Freedom of Information request to the Cabinet Office requesting details on his role and duties was rejected as apparently the Duchy of Lancaster is not a ‘public authority’. Predictable the Duchy itself is equally unhelpful stating that he has ‘delegated functions. So much for open Government.
In the United States the issue of Donald Trump and his family unethically conflating personal interest and public business has been the subject of scrutiny and hotly contested debate. In the UK the Head of State is allowed to act virtually as she pleases with little or no accountability over conflict of interests. Elizabeth Windsor is really the head of a slick corporate operation, but because of Freedom on Information exemptions we are not allowed to know to what extent she lobbies Government ministers.