Three weeks after the Queen Mother’s funeral, in April 2002, a private audit of her Coutts bank account was completed. The auditor’s finding was that the account, at the moment of her death on the 30th of March, had been overdrawn by approximately 4 million pounds. The overdraft was not new. It had been a permanent feature of her finances since the late 1960s.
The money she had not had had been spent on royal lodge, on Birkhall, on a stable of race horses, on Cheltenham Festival betting, on old masters acquired in private sale, on roughly 70 household staff, and on what one of her own granddaughters would later describe as simply quite a lot of gin. The bill for 50 years had been covered in silence by her daughter.
The figure was not, in the strictest sense, a surprise. The exact number was never published in any document on Coutts letterhead, and to this day, the precise audit total at the moment of her death has not entered the public record. Estimates have ranged from approximately 4 million pounds, the number that surfaced in the late 1990s and was most widely cited by the British press, to a higher figure of around 7 million circulated after her death.
What is not in dispute is that there was an overdraft, that it was substantial, and that it was at Coutts and Company, the private bank that had served the British royal family since 1801. The Queen Mother had banked there. Her daughter, Elizabeth II, banked there. Sarah, Duchess of York, who would also at one point hold an overdraft with Coutts of approximately 8 million pounds before it was settled, banked there.
This was the institutional plumbing inside which the Queen Mother’s account had been quietly carrying its negative balance for 30 years. The architecture of how this happened requires a short detour into the two different streams of money that supported the British royal family in the late 20th century.
They are easy to confuse and the press has confused them for decades, so it is worth being precise. The first stream was the Civil List. The Civil List was money voted by Parliament every year out of the Consolidated Fund to support the official duties of the sovereign and certain members of her immediate family. It was set periodically by statutory instrument.
The Civil List Increase of Financial Provision Order of 1990, signed in October of that year and effective from the 1st of January 1991, set the Queen Mother’s annual Civil List provision at 643,000 pounds. The previous figure, set under the 1972 Act, had been 334,400 pounds. The new number, indexed and uplifted, was what she would draw from the Consolidated Fund every year for the remainder of her life.
The Queen’s own Civil List in the same order was set at 7,900,000 pounds, Prince Philip’s at 359,000, Princess Margaret’s at 213,000. The second stream was the Privy Purse. The Privy Purse is something quite different. It is not voted by Parliament. It comes from the after-tax surplus of the Duchy of Lancaster, an estate held in trust for the sovereign as Duke of Lancaster since the 14th century.
The Duchy is the sovereign’s private property and what it produces in any given year is the sovereign’s to deploy as she sees fit for both official and private purposes. The Civil List is public money for public duties. The Privy Purse is the Queen’s own money to spend. This is the distinction that matters because what was about to happen and what had been happening for years was not a misuse of Civil List money.
It was a sustained, voluntary, undocumented use of Privy Purse money by Elizabeth II to make up the shortfall between what her mother received from Parliament and what her mother actually spent. 643,000 a year from the Civil List was the official allowance. The actual annual running cost of the Queen Mother’s household, on the most careful estimate available in the published record, was somewhere between 1 and 2 million pounds.
There was, by definition, a structural gap. That gap was filled out of the Queen’s pocket. Biographer Ben Pimlott, who in 1996 published the most thoroughly researched study of Elizabeth in print, reported the family’s private register on this subject. The Queen, faced with her mother’s spending, would say, “Oh, Mummy, grow up.
” Pimlott characterized the tone as humor, not anger. Elizabeth, he wrote, indulged her mother, helped to finance her, and on occasions stepped aside to allow her to take center stage. The “Oh, Mummy” was not the sound of a sovereign threatening to cut off the supply. It was the sound of a daughter who had decided, somewhere around 1968 or 1969, that she would simply pay the bill and accept that the bill would keep coming.
Once that decision was made, the rest was administration. By the late 1960s, the household had taken on the pattern that would persist for the next 30 years. The Queen Mother’s annual spend was running at roughly twice her official income. The shortfall was covered partly out of her own private resources, including investment income and the residue of her father, Lord Strathmore’s estate, and partly out of the privy purse.
The overdraft at Coutts began to grow. Internally, the man trying to hold the line was Sir Ralph Anstruther, an old Etonian Black Watch officer who had become equerry to the Queen Mother in 1959 and treasurer of her household in 1961. Anstruther’s job, as Wikipedia and his obituarists would later put it, without quite spelling out the difficulty, was the difficult job of trying to limit her spending.
That job, in the words of the same summary, became effectively impossible in later years. Anstruther held the treasurer’s post for 37 years. He did not retire until 1998, by which time he was 77 years old. He was replaced by Nicholas Asheton. The Daily Mail, reporting on the Queen Mother’s financial situation in January 2008, would observe that her financial situation had become more tangled as her long-time treasurer grew older.
The implication, polite and English, was that the discipline of the household’s finances had loosened in tandem with the discipline of its treasurer. Anstruther himself would die on the 19th of May, 2002, seven weeks after the Queen Mother. He had managed her finances longer than most marriages last, and the central, undisputed fact about his stewardship is that her spending was not something he was permitted to constrain.
There is a particular shape to how this kind of household failure happens. It is not the case that one day the cash flow is in order and the next it is not. It is the case that the principal, in this case the Queen Mother, does not look at the figures. She has not looked at the figures since she became Queen Consort in 1936.
She has never carried money. She has never paid a bill in cash. The mechanism by which the household runs is that decisions are made at her end of the building and bills are paid at the other end of the building. And the people at the other end of the building are not in a position to refuse the decisions made at the first end.
Anstruther could write to the racing yards to ask for the bills to be itemized more precisely. He could write to Wartski, to the framers, to the wine merchants. He could not write to the Queen Mother herself and tell her that the Cheltenham bets and the Augustus John acquisitions and the Friday night dinners for 14 were no longer compatible with her allowance.
The household structure did not permit that conversation. So, the bills came in and the bills were paid and the overdraft grew. What was she spending it on exactly? The brief inventory matters because it is what the audit was looking at. There were the houses. The Queen Mother had use of five residences of which she personally owned exactly one.
Castle of Mey, in the far north of Caithness, was hers. She had bought it in 1952 in a derelict state and spent the following 3 years restoring it. The others were Grace and Favor. Royal Lodge in Windsor Great Park, a 30-room mansion held by the Crown Estate, was her primary country residence after George VI’s death.
Birkhall, the granite-fronted lodge on the Balmoral estate, was on the Queen’s privately owned Scottish ground. Clarence House, on Stable Yard at St. James’s, was Crown-owned and was her London base from 1953 to 2002. She [snorts] also had use of Sandringham and Balmoral when the family gathered. The maintenance of these was not trivial.
Birkhall, when she first inherited it from George VI in 1952, was a house she would later describe as tiny and a place she had occupied in extreme discomfort. This was the same Queen Mother who would later be portrayed as a stoic. Her solution to the discomfort was simple.
The Queen paid for a new wing to be added in the mid-1950s. This was the first documented instance, decades before the Coutts overdraft became a topic of British journalism, of a sovereign daughter funding her mother’s preferred standard of living out of her own resources. Royal Lodge, the Windsor house, had its own gardens, its own staff, and the standing obligations Queen Mary had warned about long before, that it would require a caretaker.
The gardens would be expensive to maintain and the household would be expected to contribute to local Windsor charities. Then there were the horses. The Queen Mother’s love of jump racing was not a small hobby. She owned the winners of approximately 500 races over the course of her ownership career.
Her primary trainer from late 1949 until his death in 1973 was Peter Cazalet, based at Fairlawn, Shipbourne in Kent. Cazalet trained over 250 winners for her alone, in addition to the more than 800 winners he trained for other owners. He was British jump racing champion trainer three times. When Cazalet died, the trainer’s license for her string passed to Fulke Walwyn at Saxon House, Lambourn.
Both stables required standing financial support. Bills for shoeing, vet care, transport, jockey fees, entry fees, the bloodstock auctions at Tattersalls every October at Newmarket, where the next year’s prospects were bought, and the standing fees at the National Hunt yards, where they were prepared.
Cheltenham every March was the centerpiece of the racing year. The Queen Mother attended for decades. The Queen Mother Champion Chase, run on Festival Wednesday over two miles of jumps, would in time be named for her. The most famous race of her ownership career, and the one that says the most about the relationship between her and the public, was the 1956 Grand National.
Her horse Devon Loch, trained by Cazalet and ridden by the future thriller writer Dick Francis, was 50 yards clear of the field on the run into the finish line when he inexplicably fell. The Queen Mother’s reaction, in the witness account of those around her, was the same reaction she would give to almost every reversal of her life.
She did not rage. She did not weep. She simply observed that, “We must take it.” and walked down to the unsaddling enclosure to speak to her trainer and her jockey. The race was the most discussed racing failure of the post-war decade. It did not blunt her appetite. The horses kept coming. Then, there was the art.
This is where the audience tends to imagine reckless 18th century purchases, and the truth is more interesting. The Queen Mother was a serious collector. John Cornforth in his 1997 authorized catalog of her collection at Clarence House judged that she had acquired considerably more contemporary British art than the Royal Collection has added in nearly a century and a half.
She owned the only two Impressionist paintings ever acquired by a British royal collector. The Sisley, The Seine at Saint-Cloud, was bought in 1939. The Monet, Study of Rocks, was bought in 1945 on the recommendation of the portrait painter, Sir Gerald Kelly. Both came through the Wildenstein Gallery.
She bought a Walter Sickert, Conversation Piece at Aintree, at Christie’s in 1951 for 105 pounds. A painting that the Glasgow Art Gallery, the Tate, and her late husband had all previously declined. She commissioned 15 Windsor Castle watercolors from John Piper in 1941 for 150 pounds. Augustus John, Paul Nash, Edward Seago, Lowry, Millais, the inventory ran to scores of works.
By the late 1990s, the appetite had cooled. Cornforth wrote generously that the chase was becoming less enjoyable. The collecting that had defined her had largely been done by 1960. And then there were the staff. The household of the Queen Mother in the late 1990s ran to scores of people across her five residences.
There was a comptroller of the household, Sir Alister Aird. There was a treasurer, Anstruther, then Ashton. There were equerries on rotation, of whom Major Colin Burgess of the Irish Guards, who served between 1994 and 1996, would in 2007 publish the most candid account of life at her side. There was the steward and page of the backstairs, William Tallon, known across the household for decades simply as Backstairs Billy, who was on duty from the moment she stirred in the morning until the moment she went to bed at night, and who entered her private quarters without knocking. There were footmen, dressers, kitchen staff, chauffeurs, gardeners. There were also the racing yard payrolls, the residence’s own permanent gardeners, and the standing accounts at her London tailors and her hatters.
There were the small, recurring purchases for the household, flowers, wines, cards, gifts. Tallon, when he died in 2007, left a personal collection of royal memorabilia that auctioned for 440,000 pounds. A figure that gives some sense of the everyday scale of household gift giving and personal token traffic that flowed through Clarence House.
And then, there was the gin. Burgess’s account, serialized in the Daily Mail and quoted across the British press, sets out the daily intake. At noon, a potent mix of two parts of the fortified wine Dubonnet to one part of gin. With lunch, red wine, particularly the heavy clarets, which were her preference.
After lunch, very occasionally, a small port. At 6:00 in the evening, two martinis prefaced by the Queen Mother’s daily prompt, “Colin, are we at the magic hour?” With dinner, one or two glasses of pink champagne. Burgess, who was at her side daily for two years, would describe her as nowhere near being an alcoholic.
her life following a sedate routine revolving largely around lunch and rather a lot of booze. The bills for the seller were, by any honest accounting of a household running at this rhythm for 30 years, a non-trivial line item. The Coutts overdraft grew throughout the 1980s and 1990s. In 1999, the existence of the multi-million pound facility was publicly disclosed in the British press for the first time.
By the late 1990s, the most cited figure was 4 million pounds. The bank itself never commented. Coutts has never made an on-the-record statement about the Queen Mother’s account specifically, and the structural fact is that as a private bank serving the royal family since 1801, with an automated teller machine installed in the basement of Buckingham Palace, Coutts was not in the habit of issuing on-the-record statements about anything its clients did.
What is on the record is the parallel. Sarah, Duchess of York, the former wife of Prince Andrew, would carry her own Coutts overdraft of approximately 8 million pounds before it was eventually settled. The pattern of very large royal family overdrafts being tolerated by Coutts is established. The accommodation extended to the Queen Mother was not unique.
It was within the private banking convention that governed the relationship between the bank and the family it had served for two centuries. The way the bank handled its longest-standing customers when their cash flow ran behind their assets. There is a piece of private banking convention worth naming here. A private bank does not call in a multi-million pound overdraft on a 100-year-old client who is also the mother of the bank’s most prominent customer and the most popular member of the British royal family.
The economics of doing so would make no sense. The relationship is worth more than the receivable. The optics of doing so would be catastrophic. The convention, when a Coutts client of this profile runs into a structural overdraft, is to let the position sit, to keep it serviced informally, and to wait for the next inflow event.
In this case, case, eventually, the estate. From Coutts’s point of view, the file was always going to be made whole. From the Queen Mother’s point of view, there was never an institutional pressure to spend less. The conversation, the one Anstruther could not have, the bank also did not have. The repeated private transfers from the Queen’s accounts, the steady-state mechanism by which the overdraft was prevented from growing into something unmanageable, are alluded to in the secondary literature without being itemized. The Daily Mail in January 2008 would write that the Queen’s daughter and her grandson, Prince Charles, had quietly helped her out. Pimlott had said in 1996 that the Queen helped to finance her mother. The structure is not in dispute. The
detail is not on the public record. What is documented is that since 1993, the Queen reimbursed the Treasury for the parliamentary annuities of every member of the royal family except for two, the Duke of Edinburgh, her husband, and the Queen Mother, her mother. The Queen Mother’s 643,000 lb a year was, after 1993, the last royal annuity besides Philip’s that the British public was still actually paying.
Everything beyond that came from somewhere else. The 1992 voluntary tax decision is worth pausing on because it was the same queen in the same 5-year window who was tightening the family’s public financial position on every other axis while leaving her mother’s allowance untouched. In November 1992, she announced she would begin paying income tax and capital gains tax voluntarily.
The first British monarch in modern history to do so. The new arrangements came into effect on the 6th of April 1993. Within the next 12 months, the same civil list reform took the younger working royals, Margaret, Anne, Andrew, Edward, the Dowager Duchess of Gloucester, off the public civil list and made them reimbursable from the privy purse.
The pattern is unmistakable. The Queen was systematically reducing the call on the British taxpayer made by every member of her family except for the two people whose allowances she could not, in personal terms, be seen to touch. Her husband and her mother. That choice was hers to make. She made it.
The mother’s 643,000 pounds a year kept being voted by Parliament and her own private transfers continued in addition. 6 miles to the northwest of Royal Lodge, on the other side of Windsor Great Park, the parallel evidence of where the Queen’s available resources were going was visible in another part of the family.
Princess Anne, the Queen’s only daughter, had taken possession of Gatcombe Park in Gloucestershire in 1976. The estate had been bought by the Queen for Anne and her then husband, Captain Mark Phillips. 730 acres of Gloucestershire farmland with a Georgian mansion at its center in a part of the country where horses and hunting were the dominant economy.
By the late 1990s, Anne was running it as a working estate. She bred horses commercially. She raised cattle. She kept a working farm in the strictest commercial sense. Her own public statement of the principle given to the press long before it became fashionable for senior royals to acknowledge such things was direct.
“Being able to take on a place like this, for me, I’ve got to make it work. This is not something that comes free. This has got to pay its way, otherwise I can’t stay here.” Anne, through the 1990s, was selling horses, refining the breeding program, tightening the farm operation, doing the work of a working landowner.
The contrast with her grandmother’s household, where the central financial fact was that the bills came in and were paid from elsewhere, was not commented upon at the time, but the asymmetry was visible to anyone who looked at the family’s actual cash flow rather than at the published civil list figures.
The audit moment in April 2002 was therefore not a discovery. The Queen had been paying for 50 years. Anstruther had known the running cost for 37 of those years. The Coutts file had been with the bank since the 1960s. What changed in April 2002 was simply that the Queen Mother was no longer alive to keep generating new charges against the account, and the household aired at the controller’s office, Ashton at the treasurer’s, the Coutts relationship managers in the Strand finalized the position. It is worth being precise about what an audit of this kind would have looked like. There is no published report. The royal family’s own statement on the will, released on the 17th of May 2002 on royal.uk, names the beneficiary, the Queen, names the principal asset categories, the contents of her houses,
and provides no monetary figure of any kind. The full will was sealed by High Court order at the Queen’s application, and the British public has never seen it. What is described in the press as an audit was in practical terms an internal accounting exercise conducted by the Queen Mother’s household staff in conjunction with the Coutts relationship managers to establish the position of the bank account and the corresponding position of the estate, so that the household could be wound down and the bequests distributed. The audience folkloric figure of 4 million pounds is the most cited number, and it is internally consistent with the late 1990s reporting. The exact total at the moment of her death has never been published with primary documentation. What was sold and what was kept set the pattern for the rest of the family. The Queen Mother had, 8 years before her death, placed approximately 19 million
pounds, roughly 2/3 of her liquid wealth, into trusts for her great-grandchildren. This was the part of the estate that did not move. What did move was the contents of the houses. The most important paintings, the Monet, the Sisley, the Augustus John, the Nash, the Carl Fabergé pieces, were transferred into the royal collection by the Queen, where they would, over the following years, appear in the Royal Treasures exhibition at the Queen’s Gallery, Buckingham Palace, opening on the 22nd of May 2002. The horses in training were dispersed through Tattersalls and the regional bloodstock auctions in the usual seasonal cycles. The remaining contents, the things that did not go into the royal collection and were not earmarked for individual bequests to members of staff, were distributed within the family. The total estate, on the
published reporting available in the Telegraph, The Times, and the Daily Mail, was valued at somewhere between 50 and 70 million pounds. The overdraft of approximately 4 million was therefore a small fraction of a larger position. On a net worth basis, the Queen Mother died very wealthy. On a cash flow basis, she died approximately 4 million pounds in the negative at Coutts.
Both facts are true, and the apparent contradiction is the whole architecture of what had been going on. The estate was rich. The bank account was empty. The space between the two had been bridged for 50 years by the Queen. The other administrative fact, which sat alongside the Coutts position, was the inheritance tax structure.
Since 1993, by a memorandum of understanding signed by John Major’s government with the palace, transfers from a sovereign or consort to the current sovereign were exempt from inheritance tax. Without that 1993 agreement, the transfer of the 50 to 70 million pound estate from the Queen Mother to the Queen would have triggered a tax bill of approximately 28 million pounds at the 40% rate.
With the agreement, it triggered nothing. The Queen retained the entire estate. The British public, who had paid for the Queen Mother’s annual 643,000 pound civil list for the previous 11 years, did not see any of the 70 million pound estate returned to the Treasury when she died. This, finally, is the constitutional question, and it has to be put carefully.
There was no impropriety. The Privy Purse is the sovereign’s own money, and Elizabeth II’s transfers to her mother were her right. The 1993 inheritance tax exemption was a published parliamentary knowledge agreement, not a hidden one. The Civil List allowance, set in 1991, was within Parliament’s gift to grant or withhold.
There was no rule that was broken. There was no audit that was failed. There was no statute that was bent. What there was was an asymmetry of transparency. The Civil List portion of the funding, the 643,000 pounds, was published in the Royal Trustees reports, debated in Hansard, and visible to anyone who cared to look.
The Privy Purse portion, the actual quantum of what the Queen was transferring to her mother out of her own income from the Duchy of Lancaster, was not. The British press of the 1990s, who would have noticed at once if a junior minister had been carrying a 4 million pound overdraft for 30 years, did not press the question when it concerned the Queen Mother.
Parliament, which was free to ask, did not. The Queen, who at the same time had voluntarily begun in 1992 to 1993, to pay income tax for the first time in modern history, retained the structural option to deploy her private wealth as she chose, and chose to deploy a significant portion of it on her mother.
The Queen Mother, for her part, did not, to the best of the published record, sit down at any point in the last 30 years of her life and propose a different arrangement. She had been the Queen Consort of George VI from 1936 to 1952. She had been, in her own description and in the description of her household, the woman who had stayed in London during the Blitz, who had toured the bombed East End, who had refused to allow her children to be evacuated.
She had been, after February 1952, the most public widow in the country. The position she occupied was unique, and the household she ran was the household she had run as Queen Consort, continued unaltered into the half-century of her widowhood. Reducing it was not on her list of priorities. Reducing it was not on her daughter’s, either.
There is one final piece of the cash flow worth naming, because Princess Margaret died 7 weeks before her mother. Margaret had her own Civil List allowance of 213,000 pounds a year, and her own well-documented financial difficulties through the 1980s and 1990s. Margaret died on the 9th of February, 2002, after years of declining health, and her ashes were interred in the King George VI Memorial Chapel at Windsor, at the same family service in which the Queen Mother would be laid alongside George VI 8 weeks later. The Queen, in the spring of 2002, lost her sister and her mother within 49 days of one another, and the two financial files closed at the same time. There would be no further Margaret and Queen Mother household allowance to manage at the Privy Purse Office. There would be no further bills from the
racing yards at Fairlawn, or from the Coutts overdraft management team. There would be no more transfers in. After 50 years of underwriting her mother, the obligation was complete. She died on the 30th of March, 2002, at the age of 101, in her own bed at Royal Lodge, surrounded by family. Three weeks later, when the auditors finished, the household learned what the Queen had been paying for in silence for 50 years.
Royal Lodge, Birkhall, the horses, the gin. £4 million in the negative on the day she went. The exasperation in, “Oh, Mummy,” had not, it turned out, been about anything as small as a dress allowance. It had been about the bill, a 50-year bill that came due on a Friday morning in April.
