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Sensemaker: William’s big raise

Sensemaker: William’s big raise

What just happened

Long stories short

  • Retreating Russian soldiers in eastern Ukraine said they were outnumbered eight to one (more below).
  • A Met Police officer was suspended from duty for shooting Chris Kaba, an unarmed Black man, in South London last week. 
  • Succession, in which Brian Cox and others play versions of Rupert Murdoch’s family, won this year’s Emmy for outstanding drama series.

William’s big raise

At a stroke last week Prince William became the new Duke of Cornwall and one of the biggest landowners in Britain. Today a Labour peer says the management of William’s new duchy is “completely obfuscated” and in need of radical reform. 

The Duchy of Cornwall gives the heir a new annual income of at least £21 million. Its assets include the Oval cricket ground, 260 farms, a third of Dartmoor National Park and a £38 million Waitrose depot near Milton Keynes. Together they’re worth nearly £1 billion – a third more than those of the Duchy of Lancaster which King Charles III has just inherited tax-free.

The duchy will change William’s life, and it might keep him up at night.

  • It will change his relationship with Harry, if their father’s experience is any guide. The duchy let Charles “enjoy a level of luxury unequalled by his siblings” and set him apart from them, according to the biographer Sally Bedell Smith. It will give William the kind of permanent financial cushion Harry can only dream of as he funds own security from lacklustre podcast earnings and a £20 million book advance.
  • It will make William prioritise between conservative landowning and entrepreneurialism, although Charles managed both. On his watch, duchy lands have pioneered organic farming and duchy assets have grown in value more than 100-fold since the 1970s. William has said he doesn’t plan to rock the boat, but doing nothing may not be an option.
  • That’s because the duchy as currently run invites accusations of not quite levelling with the public. 

As things stand William will pay no corporation tax or capital gains tax on duchy earnings, and income tax only on a “surplus” left after deduction of expenses that are at best loosely defined. 

In 2018-19 Charles paid only £4.7 million tax on £21.6 million in income because he was able to write off the wages of a 116-member household including his butler, two valets, three chauffeurs, five chefs, nine housekeepers, 14 “communications workers” and 18 gardeners, the investigative journalist David McClure found. Charles also paid no tax on the £5 million he gave that year to his sons. 

“I don’t know how they calculate the surplus and there’s no transparency about how the tax is calculated,” says Tony Berkeley, a Labour peer who’s campaigned for more transparency from the duchy. “It’s just completely obfuscated. Wouldn’t we all like to agree between ourselves and the Treasury how much tax we pay?”

The duchy says its capital gains “have to be reinvested in the business and cannot be distributed”. It pays no corporation tax on the basis that it’s not a corporation. Lord Berkeley’s advice to the new Duke of Cornwall is to end that pretence and

  • turn most of the duchy’s assets over to the Crown Estate, which already manages Crown assets for the exchequer, paying a share of proceeds to the monarch;
  • run what remains “like any other big estate”, paying corporation and capital gains taxes as usual; and
  • lift restrictions that prevent most duchy tenants buying their homes and farms.

Five days into the national mourning for his grandmother, William has yet to be heckled by the largely good-natured crowds that have turned out to watch her coffin’s progress to Edinburgh and, today, to London. Not so his uncle Andrew, who was called a “sick old man” by a bystander on the Royal Mile. 

The bystander was arrested for a breach of the peace. A handful of others have been detained in Scotland for alleged public order offences. In London a woman was moved on from Hyde Park’s Carriage Gates for holding a piece of paper with the message “Not My King”, prompting a spokesperson from Liberty to accuse police of using new crowd control powers in “a completely warped way”.

The Queen’s death is proving a test for freedom of speech. William should prepare for the demands of freedom of information.


CAPITAL ECONOMY, BUSINESS AND FINANCE

Chinese Monetary Fund
China is finding that a good way to preserve access to scarce raw materials is to lend money on the sly to countries that hold them. Western economists worry the effect will be to stack up developing countries’ debts unsustainably with no plans to put their economies on a stable footing. The FT has seen data compiled by the AidData Lab at William and Mary University, itemising Chinese loans worth nearly £33 billion to Pakistan, Sri Lanka and Argentina. These are separate from finance attached to China’s $838 billion Belt and Road infrastructure megaproject – but often related in that the new loans are meant to prevent defaults on older ones for Chinese-built bridges, roads, ports and airports. Kenya, Venezuela, Egypt, Ecuador and Ukraine have also received loans of this sort. IMF loans come with strings attached: recipients are meant to put their fiscal houses in some sort of order. If China is setting itself up as an alternative lender of last resort its USP seems to be fewer strings – or secret strings.


TECHNOLOGY AI, SCIENCE AND NEW THINGS

Rocket failure
One of Jeff Bezos’ New Shephard space rockets failed shortly after blast-off and crashed back onto the New Mexico desert. No one was aboard and no one was injured. The mishap will set back the Amazon founder’s space efforts nonetheless, at least while the US Federal Aviation Administration investigates and possibly longer; he won’t want anything like this to happen with humans in the capsule that sits atop the rocket. The silver lining was that the escape system designed to keep cargoes intact in the event of booster failure worked perfectly. If Bezos, or William Shatner or any of his other space guests, had been on board, they would probably have lived. 


The 100-year life health, education AND GOVERNMENT

NHS queue
750,000 people are expected to queue in London to see the Queen lying in state in Westminster Hall. Many will leave disappointed before the funeral on Monday as capacity is limited. Separately, new NHS England figures show 6.8 million people are on waiting lists for routine hospital treatment, with over 377,000 currently waiting more than a year. Some of them will be left disappointed on Monday. OpenDemocracy reports that some NHS trusts are cancelling non-essential appointments because of the last-minute bank holiday. Examples include hip and knee replacements, cataract surgery, maternity checks and some cancer treatments. In one letter sent to a patient who had been waiting months for surgery, the NHS claimed “unforeseen circumstances” led to the cancellation. A pregnant woman whose foetal scan was postponed waited on hold for four hours when she tried to reschedule. 


Our planet CLIMATE AND geopolitics

“Give us weapons!”
Abandoned Russian tanks line roads in eastern Kharkiv province. Personnel carriers lie half-submerged in the Donets river, and from the right bank of the Dnipro River near Kherson come rumours of a large-scale surrender. They’re unconfirmed but Ukraine’s President Zelensky has doubled his estimate of territory retaken in the past 24 hours, from 3,000 square kilometres to 6,000. He’s repeated his call for more weapons to complete the job of driving out the invaders, and Lithuania’s foreign minister has scolded the rest of the West for taking too long to oblige. “No more westplaining. No more dithering. No more negotiating with terrorists,” Gabrielius Landsbergis tweeted. “Those who doubted Ukraine’s strength should be apologising. Ukraine defended us all.” New acronym: ATACMS, for army tactical missile system, with a range of 190 miles. Ukraine wants it. The US has so far declined. 


CULTURE soCIETY, IDENTITY AND BELONGING

End Putin
Not many people saw the end of the Soviet Union coming. Then its collapse was celebrated knowingly as the return of history, and in one case as the end of history. Not many people see Putinism ending just yet, but it’s a thing to be devoutly wished and Anne Applebaum is anxious in a customarily clear-sighted essay in the Atlantic that the West should be ready if the recent rout of Russian forces in eastern Ukraine starts a snowball effect that ends up removing Putin from power. This misbegotten war is now the centrepiece of his claim to legitimacy, she writes. Defeat and his survival are incompatible. Prepare, at the very least, for instability across 11 time zones.


Thanks for reading. Please share your thoughts on the Queen and tell us how you think Tortoise should cover this moment. Email sensemaker@tortoisemedia.com.

Giles Whittell
@GWhittell

Additional reporting by Phoebe Davis.

Photographs Getty Images, Kostiantyn Liberov/AP/Shutterstock


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