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correspondents [her former Assistant Private Secretary, Sir Edward Ford], it has turned
out to be an annus horribilis…’ Sir Edward, a classical scholar, had invented the phrase
to distinguish 1992 from ‘annus mirabilis’, which is used to describe a particularly
outstanding year as the Queen’s fortieth anniversary might have been expected to be.
The Sun translated it into the vernacular: ‘One’s Bum Year’. It was a low point in her
life, not just because of what had happened with one disaster after another, but because
of the lack of gratitude, even derision, with which her forty years of dedication seemed
to have been crowned.
On 26 November, six days after the Windsor fire, Thatcher’s successor as Prime
Minister, John Major, made a surprise announcement in the House of Commons that the
Queen and the Prince of Wales had volunteered to pay tax on their private incomes and
that the Queen would reimburse the Civil List annuities to five of the royal family – the
Princess Royal (Princess Anne had since 1987 enjoyed this title, customarily bestowed
on the eldest daughter of the sovereign), the Duke of York, Prince Edward, Princess
Margaret and Princess Alice, Duchess of Gloucester – who would be paid from revenues
of the Duchy of Lancaster. At the same time he told Parliament that the National Audit
Office would be looking into expenditure on the royal palaces, something which the
Palace had hitherto striven to avoid. As a public relations exercise the affair could
hardly have been worse handled, the timing of the announcement making it seem as if
Elizabeth had been panicked by the public reaction into agreeing to pay tax. The reality
was rather different, although the essential point was true: that Elizabeth was agreeing
to pay in order to deflect criticism of the monarchy and was indeed responding to public
opinion.
For once, Elizabeth’s cautious instincts had let her down; by moving too slowly in
response to public feeling, she had allowed a head of steam to build up and a hue and
cry about the expense of the monarchy to develop which might have been avoided by
swifter action. Part of her unwillingness to move on the income tax issue had been
reverence for her father. George VI, who had inherited the throne in unusual
circumstances after the Abdication, which had entailed his brother’s removal of large
sums and pay-offs, had been left ‘virtually without two beans to rub together’, according
to one of the royal courtiers. He it was who, in order to ensure the future of the
monarchy, had negotiated the exemption with the Treasury under the sympathetic eye
of Neville Chamberlain in 1937. And it was he, in effect, who had impressed on his
daughter that she should retain that exemption if she wanted to maintain the
independent position of the monarchy. As we have seen, Elizabeth even improved on
her father’s position by obtaining an exemption on payment at source of income tax on
her investments and a refund of tax already paid.
On 11 February 1993 the Lord Chamberlain, Lord Airlie, took the unprecedented step
of holding a press briefing on the new fiscal arrangements for the royal family, while
Michael Peat, for whom the new title of Finance Director had been created, announced
them on television. The main thrust of the statement was that the Queen and the Prince
of Wales had agreed to pay income tax and capital gains tax on a voluntary basis