Apr
2023
Heroes: Democracy or Looking After Number 1?
DIY Investor
14 April 2023
‘I am the son
And the heir
Of a shyness that is criminally vulgar’
The more I read the more I am convinced that not only is the country run by the wrong people, it is run for the benefit of the wrong people. As a result the rich get richer and the poor get poorer.
Before we get onto that, the government clearly think that global warming is a hoax. Jacob Rees-Mogg, now a prominent backbencher has dismissed it as ‘climate alarmism‘ that is responsible for high energy prices and that it is unrealistic for scientists to project future changes to the climate because meteorologists struggle to correctly predict the weather.
Remarkably, but not surprisingly, UK Export Finance (UKEF) has financially supported the high-carbon aviation industry with billions of pounds since the Paris climate agreement was adopted.
‘the government clearly think that global warming is a hoax’
The effective subsidy for new airports, aircraft and maintenance comes despite the agency believing the oil-dependent sector is unlikely to begin cutting emissions ‘materially’ before the next decade.
The agency was reported to have ended support for fossil fuel projects two years ago. This key pledge, made by the UK, which hosted the COP26 climate talks, won praise from green groups.
However, over half of the support it has provided since the landmark Paris climate accord was agreed at the end of 2015 has gone to aviation, with Rolls-Royce, Airbus, Boeing and British Airways taking the lion’s share.
Just one of the 62 deals, listed in annual reports, appears to have come with any climate-related conditions attached.
New zero now means zero support it would seem.
However, from a useless government we turn to the royal family, which are, quite honestly a waste of time and money. Before anyone say’s, ‘oh, but what about all the visitors they attract?’ It’s a myth, Paris remains the worlds most visited city, and they disposed of their lot over 200-yrs ago (1).
‘from a useless government we turn to the royal family, which are, quite honestly a waste of time and money’
The truth is simple, the royals are very expensive; the Borbones of Spain cost a mere £7.4m a year, last year we paid the Windsor’s £86m, plus £41.8m in revenues from their Duchy estates of Cornwall and Lancaster. Adjusting for inflation, the Monarch and Prince of Wales have received the equivalent of more than £1.2bn in total revenues from the two estates.
The duchies operate as professionally run real estate empires that manage swathes of farmland, hotels, medieval castles, offices, shops and some of London’s prime luxury real estate. They also have substantial investment portfolios, but pay no corporation tax or capital gains tax.
Profits from the Duchy of Lancaster, which consists of 18,481 hectares of rural land, primarily in the north of England and the Midlands, automatically pass to whoever is sitting on the throne. The estate itself is valued at £652m.
The Duchy of Cornwall, which encompasses 52,450 hectares, mostly in the SW of England, is worth more than £1bn. Its profits still only go automatically to the male heir to the throne.
The royal family’s claim to the income from the duchies stems from archaic charters dating back to when the country was divided into medieval fiefdoms.
Ever since the advent of parliamentary democracy, generations of MPs have challenged the arrangement, calling for duchy profits to be paid to the Treasury. Parliamentary debate has often coincided with the accession of a new monarch, amid renewed scrutiny over their public and private sources of wealth.
Charles has reported that 49% to 51% of his duchy income was spent covering public and charitable functions in recent years, with a percentage spent privately, including on secretaries, valets, gardeners, chefs, stable hands and farm workers.
‘used Duchy income to help Prince Andrew pay an undisclosed sum, to settle the sexual assault case filed against him’
However, the income isn’t always spent so responsibly. For example, the late queen was reported to have used Duchy income to help Prince Andrew pay an undisclosed sum, to settle the sexual assault case filed against him by Virginia Giuffre.
The veteran Labour MP Margaret Hodge, who led an inquiry into the Duchy of Cornwall in 2013 when she chaired the public accounts committee, said parliament had been unable to establish how duchy income was spent.
‘It was very unclear. There is little transparency.’ She continued, describing the status of the duchies as a ‘deliberate ambiguity’.
In fact ambiguity seems to be their stock-in-trade, especially where gifts are concerned.
It is reported that they appear to have appropriated two sets of stamps that were official state gifts, incorporating them into an extraordinarily valuable private stamp collection that King Charles inherited from his mother, estimated to be worth at least £100m
‘ambiguity seems to be their stock-in-trade, especially where gifts are concerned’
The gifts, a mint collection of historical Canadian stamps and a rare set of stamps from Laos, were formally given to the royal family as state gifts. This raises further questions about whether they are abiding by the letter or spirit of guidelines that prohibit official gifts from being treated as private property.
The royals’ gift policy distinguishes between ‘official gifts’, which are generally those received in connection with a royal’s official role or during the course of a formal engagement, and ‘personal gifts’, received from people who members of the royal family know personally, which are not publicly declared. (2)
It states that ‘all official gifts given to the sovereign from a head of state or host government automatically become part of the royal collection‘, which is maintained by the Royal Collection Trust.
Given the magnitude of their wealth and sizeable income it is no wonder they are so secretive about their wealth and incomes. Even the wills of obscure royals are locked away from the public gaze.
The Guardian drew some interesting parallels to highlight how the money might be better used:
- £1m of the king’s income would buy five AgeUK day centres. Or it could train 250 early years educators for nurseries. Source: Early Years Alliance.
- £1m would fund 25,000 GP appointments. Source: the King’s Fund.
- The annual public funding for the royals would pay for 30-hours of childcare per week for almost 13,000 three- and four-year-olds for a year. Source: the IFS.
- The £1.2bn from the Duchies would pay for 30,000 nurses for a year.
Like many regressive policies and institutions in this country, they thrive on the support of the elderly. YouGov found that 40% of under-25s want the monarchy abolished. At first glance, the fact that the royals have a solid 60% support appears encouraging for them, however, 10-yrs ago it was 75%.
‘They are symbol of our national self-deceit about our power and importance in the world’
The monarchy is the ultimate example of style over substance. It’s all ceremonial trappings that paper over a sea of nothingness. They are symbol of our national self-deceit about our power and importance in the world. All that ceremonial grandeur underpinned the delusions that misled half the country to believe Britain could rule the waves again.
I suspect that many of those ‘leave’ voters were monarchists. They are of that generation still in awe of someone they regard as their ‘better’, which, in 2023 is sad! Of course, ‘leave’ was based on reclaiming our ‘sovereignty’, yet we happily cede it to a bunch of overly wealthy half-wits. They are ceremonial, the royal prerogative is given to the PM in parliament as absolute power, barring a weak House of Lords.
The weakness in the system was exposed by Boris Johnson, when he ordered the Queen to let him prorogue parliament illegally, and she, unelected, had no power to stop him. Many countries have elected presidents who act as protectors of constitutions against such predatory behaviour.
‘At its heart monarchy is about false patriotism, which explains its appeal to right-wing politicians’
At its heart monarchy is about false patriotism, which explains its appeal to right-wing politicians. Patriotic behaviour and beliefs are not exclusive to the right, left-winger’s simply have different values and ideals for their country. The current populist version of the Conservative party is represented by the Telegraph and Mail, fawning over the monarchy, whilst supporting the government as it trashed the institutions we should be proud of, such as the BBC, the NHS, universities, the arts and sports from the grassroots up.
Inheritance and entitlement are dangerous subjects that highlight some of our of our worst tendencies, such as nepotism, inequality, privilege and inherited wealth.
To conclude, YouGov found that 52% are not interested in the coronation. For most it’s just another day off, only this one costs us around £100m. This comes at a time when many of the population are struggling with unpayable bills. We simply cant afford it, and we really don’t need it.
However, it isn’t only the royal making out like bandits. Ever since Thatcher became PM in 1979 policy has favoured rentiers, and the wealth gap, which had narrowed in post-war years, began to expand again. The 2008 GFC, and the policy of austerity that followed saw income equality explode, and concentrated assets and wealth into the hands of the few.
The assets they coveted could be described as ‘income generating’ such as residential property, which as I wrote in ‘An Englishman’s Home is No Longer Their Castle‘, should not be for investment purposes.
Another generator of income are care homes, which are increasingly becoming assets of the wrong type of people.
A good, or bad example of this is Runwood Homes, the UK’s sixth largest for-profit care home group, which charges residents >£1,000 a week, often paid by the taxpayer.
The owner of the group paid himself at least £21m in 5-years to 2022 despite inspectors finding multiple breaches of staffing, safety and leadership rules, with residents left in dirty incontinence pads and staff accused of rough handling.
The majority of 6- homes registered as offering dementia care were ranked ‘good’ by Care Quality Commission inspectors over the past 5-years. But almost one in three were rated ‘requires improvement’.
Problems reported by inspectors include not enough care workers, meaning residents unable to get to the toilet, stuck in bed, lacking activities, feeling ‘trapped’ and ‘at risk of harm’.
Inspectors heard reports of ‘awful’ food and found some staff who were not trained or checked for criminal records. In one home, inspectors found residents were restrained by staff strapping a table top to a chair.
Several breached Care Act regulations including for a lack of staff to look after people safely and protecting people from abuse.
‘Britain is a poor society with some very rich people’
Runwood also received £12.3m in government grants in 2020 and 2021 related to the Covid pandemic, including for infection control and the job retention scheme. Over the same years it awarded salary to the highest paid director and dividends totalling £14.3m.
The disaster that is Brexit aside, the economic policies of recent Tory governments has been appalling. Despite several bouts of austerity we are deeper in debt than ever.
According to the International Monetary Fund’s Fiscal Monitor, the UK’s overall national debt will continue to rise over the next 5-years, and is forecast to increase from 103% of GDP in 2022 to 113% by 2028.
Net debt – which excludes financial assets owned by the government – is also forecast to rise, from just under 92% of GDP in 2022 to just over 101% in 2027 and 2028.
The IMF said the cost of subsidies to consumers faced with rocketing energy bills meant repair of the UK’s Covid-battered public finances was taking longer than in other developed countries.
Which begs the simple question, what are we doing with all this money? Looks to me as if its going to all the wrong people. To reuse a quote from John Burn-Murdoch in the FT, ‘Britain is a poor society with some very rich people’.
‘We want your homes,
We want your lives,
We want the things you won’t allow us‘
Notes:
Philip’s flirting with Traitors’ Gate this week and we’ve just checked DIY’s insurance policy to ensure he won’t be taking any of us with him.
However, thus presented, his conclusions about the monarchy are pretty difficult to fundamentally quarrel with.
And that equally applies to the shock revelation that this government doesn’t GAF about the environment. Sunak didn’t exactly hide his Kevin the Teenager demeanour when he was shamed into going to COP27, and such is this government’s unswerving support for planet frying fossil fuels that they may consider The Crazy World of Arthur Brown for their campaign song.
The government’s ‘Jet Zero’ policy has more holes than Onslow’s vest; allowing unfettered growth in aviation whilst relying on sham carbon offsets, fantasy fuels and ludicrous levels of carbon capture is pure fiction, and currently being challenged in the courts. That UKEF has been shovelling cash to Rolls-Royce, Airbus, Boeing and British Airways surprises nobody. One day the hold that aviation has over this government will become clear, and in the meantime we can expect more gaslighting and greenwashing on an industrial scale – the upgrades and expressions of appreciation must be abundant (check that policy again…Ed).
So, what got Philip’s goat about the monarchy?
‘This week had a post-bank holiday feel to it.
The big news was NI and 25-yrs since the peace accord, but more about that next week.
Instead we take a slightly oblique look at income inequality through the eyes of the Windsor’s who, to paraphrase “Four Weddings and a Funeral”, are “doing terribly well”.
The debate over the monarchy is binary, you are either in favour of them or not. What is more open to debate is the cost of them, and how they are funded.
I read not so long ago that they were struggling to afford Buck House. Oh dear! Do what the rest of us would have to, downsize. Or, sell some off, apparently they own around 30.
Tory policy has seen income inequality proliferate, and has created a small rentier class, who lust for income producing assets sees them own inappropriate assets, such as care homes.
The thing with care homes, is that the clue is in the title, “care”. Some years ago I took a friend to see someone who was an owner in that sector, unfortunately they didn’t see people they saw numbers and assets. As he said after the meeting; “they are totally the wrong people to be owners of care homes“.
Austerity has been a driver of income inequality, yet despite all the belt-tightening of the majority, the IMF tells us we will owe more money, not less!
What else happened this week?
There was the righteous indignation of the Tory’s and their media acolytes as Labour launched some hard-hitting campaign adverts ahead of the May local elections. Just think, when the Saatchi’s did that for Thatcher in 1979 they were lauded for their genius. Ah well, the truth always hurts.
Oh, and Liz Truss reappeared; remember her? Fresh from trashing the economy she is now taking on foreign affairs, more specifically China, and admonishing Macron for his visit there. Will she never learn?
Lyrically, we start with The Smiths, and the wonderful “How Soon is Now”. To finish we have Pulp and “Mis-Shapes”. Enjoy!
@coldwarsteve
Philip Gilbert is a city-based corporate financier, and former investment banker.
Philip is a great believer in meritocracy, and in the belief that if you want something enough you can make it happen. These beliefs were formed in his formative years, of the late 1970s and 80s
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