It's Time for Prince Charles to Join Twenty-First Century

The duchy has to comply with the UK employment and health and safety laws. It collects and pays VAT on its turnover. This compliance gives it the appearance of a public organisation, subject to the laws applicable to everyone else. At the same time, its ancient privileges enable it to function as a state within a state.
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The Duchy of Cornwall, whose sole beneficiary is Prince Charles, Duke of Cornwall and heir to the throne, has published its annual accounts. They show that his for the year to 31 March 2014 was £21.678 million, compared to £20.201 million for the previous year.

The duchy generated £19.51 million (£19.051 for 2012/13) and the rest is provided by taxpayer grants to cover his travels and official duties. The Prince get a vast amount of tax deductions for running his 127 staff, including cooks, butlers, porters, valets, chefs, gardeners, drivers and other servants.

The Prince pays income tax on the remainder, but does not reveal the exact amount. The £4.188 million revealed in his annual review (page 27) also includes VAT. This compares to £4.426 million for 2012/13, a reduction of £238,000 which is mainly due to the government' decision to slash the top rate of income tax.

The accounts contain some oddities. For example, the Prince says that he pays a rent of £630,062 for the use of Highgrove House (page 59 of the duchy's accounts). Who does he pay this rent to? He pays this to the Duchy of Cornwall. Who owns the Duchy of Cornwall and receives all of its profits? The answer is Prince Charles! In fact, the Prince is paying rent to himself and there is no cash outflow at all.

The duchy was created in 1337 by Edward III to generate income for the heir to the throne. It does not fit the world of early twenty-first century and is mired in contradictions. Is it a public organisation or a private fiefdom?

Is it part of the Crown? If so, then all the checks, balances, scrutiny and accountability that apply to 'public' assets should also apply to the duchy and its custodian (i.e. Prince Charles). Its records should be subjected to periodic scrutiny by the National Audit Office to determine whether the organisation is operating efficiently and effectively and that the public is getting value for money. But none of this applies to the duchy.

The title "Duchy of Cornwall" is a misnomer as its power and operations extend far beyond the borders of Cornwall. With assets of £948 million, today's duchy is a sprawling commercial conglomerate. Its business covers biscuits, snacks, jam, marmalade, honey, chocolate, organic food, seeds, holiday cottages, farm produce and property rental, just to mention a few. It is the third largest landowner in the UK, owning 53,134.1 hectares of land in 24 counties, mostly in the South West of England. It also owns the Oval cricket ground, Dartmoor Prison, a Holiday Inn hotel in Reading and Waitrose's warehouse in Milton Keynes.

The Duchy has to compete to sell goods/services and buy/sell assets, but it enjoys special privileges which must lead to unfair competition. Unlike its competitors, the duchy is exempt from paying corporation tax on its profits and capital gains tax on profits made from the sale of its assets. This enables it to amass a greater amount of cash resources which can be used to outbid rivals and thus distort markets and competition. The payment of taxes provides education, pensions and healthcare for workers and social infrastructure, such as transport and security, all of which are essential for the profitable operations of the duchy. Through the enjoyment of special exemptions, the duchy and the Prince are having a free-ride on the back of ordinary taxpayer.

The estate of any deceased entrepreneur incurs inheritance tax, and this also takes into account the value of any business. However, the Prince is exempt from inheritance tax and the entire value of duchy can pass to his heir without any deductions. Prince also enjoys the right to veto legislation passed by the UK parliament

The duchy has to comply with the UK employment and health and safety laws. It collects and pays VAT on its turnover. This compliance gives it the appearance of a public organisation, subject to the laws applicable to everyone else.At the same time, its ancient privileges enable it to function as a state within a state.

For example, the Duke of Cornwall, in this case Price Charles, is the competent harbour authority for the Port of St Mary's in the Isles of Scilly. He has the power to impose regulations for the management of vessels in the harbour, backed up by the power to impose fines. He has the right to appoint Church of England priests within the duchy. As a regulator and law enforcer, the duchy is a public body, but it refused to comply with requests made under the freedom of information laws by arguing that it is a private body. The freedom of information tribunal was not persuaded

The feudal powers of the Duchy of Cornwall cannot be reconciled with the democratic mood of early twentieth century. It essentially functions as a corporation and should be subjected to all the laws applied to other corporations. Rule making and law enforcement should be matters for elected and democratically accountable officials rather than some medieval organisation. If the heir to the throne must have income, it would be far better for parliament to decide that. That way, it can ask questions about the value for money whereas now it can't. Isn't time, Prince Charles joined twenty-first century.