They submitted to us a memo outlining the history of the duchy plus an annex showing the accounts of the receipts and disbursements of the duchy for the year ended 31 December 1970. We took oral evidence on the basis of that memo on 6 July 1971, almost exactly 11 years ago to the day.
Naturally, I was the first to put the questions to the officials of the duchy. I was interested in the origins of the duchy. As the Minister said carefully from his brief, the duchy dates from 17 March 1337, when a new rank was added to the English peerage by Edward III, when his eldest son was created Duke of Cornwall by parliamentary charter. The charter was granted to Prince Edward and his heirs. It provided this estate, which originated a long way back and was taken from the lords of Cornwall, who originally obtained their estates from the plunder of William the Conqueror. We are talking about plundered land. The estates were described in the memo as being in Cornwall, Devon, Somerset, Dorset, Gloucester, Wiltshire, the Isles of Scilly and Kenington and forming a total in 1970 of 128,930 acres.
It is important to understand that all this took place 600 years ago. At the time that the charter was granted, Edward III was aged 24 years, having succeeded to the throne at the age of 14 years. There was no democracy then as we know it today. Kings and landowners were all-powerful and they shared out the spoils as they wished. The kings and their sons had a fair whack.
The memo states:
The Duchy of Cornwall was largely made up of the possessions of the Earls of Cornwall, which go back to 1066." Over the weekend the Prime Minister cajoled the
railwaymen because they want to return to an agreement of 1919. Let the right hon. Lady read the 1066 agreement. Why does she adhere to the history books when it suits her purposes and upbraid the railwaymen for daring to wish to adhere to an agreement that was made about 63 years ago?
The estate is presumed to be the private property of the Duke of Cornwall, although the duchy functions under Act of Parliament—the Duchy of Cornwall Management Acts 1863 and 1893—which provide that the accounts of the duchy must be presented annually to the House. They are not available in the Vote Office. I have tried to ensure that they are made available there so that all hon. Members can examine them. I am the only hon. Member who goes to the Library because I know when they should be published. Only one copy is available, but one can make a copy of that. I have one for every year and I have built up a nice little pile from which I shall quote in the latter part of my speech.
As my right hon. Friend the Member for Swansea, West (Mr. Williams) said, the accounts are designed to prevent hon. Members from obtaining information rather than to disclose it. I quote from a Treasury memo presented to the Select Committee in 1971:
The income and the property of the Duchy of Cornwall is exempt from income tax, surtax, capital gains tax and estate duty.
When questions were asked of the Treasury witness on this matter on 6 July 1971 by the former Leader of the House, the right hon. Member for Chelmsford (Mr. St. John-Stevas)—who was given the boot by the Prime Minister—and by my right hon. Friend the Member for Huyton (Sir H. Wilson), it was explained to us that the tax exemptions were based on the opinions of Law Officers given in 1913 and 1921.
The right hon. Member for Chelmsford asked:
Following up on that point of the Duchy of Cornwall, why is the income from that Duchy not liable to tax?
Mr. Strudwick replied:
This question was raised with the Law Officers of the Crown, first in 1913, particularly in relation to mineral rights duty, and again in 1921. Their answer, I am afraid, which is all I have, does not really take us much further, because they simply
said that the principles which render … an Act of Parliament inapplicable to the Crown, unless the Crown is expressly named, apply also to the Prince of Wales in his capacity as Duke of Cornwall. This result arises from the peculiar title of the Prince of Wales to the Duchy of Cornwall. That is all they said. What the peculiar title is, I am afraid I cannot say.
That matter was followed up by my then right hon. Friend, now unfortunately deceased, Mr. Charles Pannell, who was interested in such matters. He said:
I am interested in this Law Officers' opinion in 1913 on the Duchy of Cornwall. I should like to hear more about that. You have not in that document the circumstances that led to the first enquiry to obtain the Law Officer's opinion.
The answer was:
I do not think I have it in any detail. The question did first arise in relation to mineral rights duty which was one of the four duties on land values imposed in 1910 by Lloyd George, I think, and this duty would have fallen perhaps heavily on the Duchy of Cornwall. Quite how the question came up, I do not think I can say. The opinion of the Law Officers was desired—this is the instruction—with reference to a question which had arisen between the Board of Inland Revenue and the Duchy of Cornwall, whether they were bound to make returns. I suppose—this is only guesswork—that the Board of Inland Revenue asked the Duchy of Cornwall to make returns of their mineral royalties for this purpose and the Duchy officials asked whether they had to do so.
We have never received to this day a satisfactory answer from any Government, or from any Treasury official as to precisely why not one penny of the revenues and the income of the Prince of Wales is taxable.
I want to quote one further passage. My right hon. Friend the Member for Huyton said:
I should like to ask a question of Mr. Strudwick, who I feel seems to be over-deferential towards the advice given by long-dead Law Officers. I think it was Sir Rufus Isaacs; he may well have been preoccupied with the transactions of another select committee at the time. As I understood Mr. Strudwick, the judgment was very short and a little inscrutable, because it referred to either the peculiar or the special nature of the Duchy of Cornwall, and did not go on to say what was peculiar or special. But the Inland Revenue, more trusting than they would be today, accepted it without question, and it seems to me they have gone on doing so. Has there been any further elucidation of that special or peculiar nature from later Law Officers?
The Treasury official, Mr. Strudwick, replied:
In 1921 we did put to the Law Officers the specific question of liability to income tax and the Law Officers of that time who, I understand, were named Hewart and Pollock, confirmed completely the 1913 opinion and said it applied to income tax, but again gave no reasons.
We have never received any reason why those revenues should be tax-free. The present Prince of Wales has had an income from the duchy since he was a child of 3 or 4—from 1952 onwards. In 30 years that has amounted to several million pounds, on which not a penny of tax has been paid.
The accounts for the year ended December 1981 are difficult to understand and I propose therefore to read from them:
Excess of receipts over disbursements for the year payable to His Royal Highness (of which 25 per cent. will be paid to the Treasury) was £771,480.
Deducting one-quarter from that, last year the Prince of Wales received, tax free, from the estate £578,610. That figure will increase steadily. One of the purposes of the Bill is to so increase the efficiency of the management as to maximise and increase still further the revenues from the estate all of which can go, and probably will go, eventually into the pocket of the Prince of Wales.