Queen Elizabeth II cedes control of finances: reports

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Queen Elizabeth II has been forced to give up the ultimate control of her finances to the British government under a deal agreed in 2006 and kept secret until now, reports said Thursday.

The revelation came in hundreds of letters obtained by a British newspaper after a four-year freedom-of-information battle and has already provoked calls for greater scrutiny of the royal finances.

The "financial memorandum" gives the government an effective veto over how the monarch spends a 38.2-million-pound (45-million-euro, 60-million-dollar) yearly allowance granted by parliament to pay for her palaces and staff.

The deal, quoted in The Independent newspaper, stipulates that in the event of "irreconcilable difference" the government can stop payments and take over the financial management of the palaces itself.

The deal came after years of disagreement over the royal budget, with the queen's office citing the difficulties of maintaining Buckingham Palace in London, Windsor Castle west of the capital and other historic buildings.

The pact, agreed between the queen and the previous Labour administration which lost power in May, became public under Britain's freedom of information laws following a four-year campaign by the newspaper.

Hundreds of letters between the queen and her government obtained by the daily show the royal family's appeals for financial help.

After one exchange the government gave the queen two million pounds to help "cash-flow problems".

Buckingham Palace was not immediately available for comment.

Besides the budget for the palaces, the government is also responsible for setting the size of the so-called "civil list", covering the expenses of Queen Elizabeth and her husband, Prince Philip.

The list was set in 1990 at 7.9 million pounds per year, and so has effectively dropped in value over the last 20 years by 76 percent due to inflation.

In a deal struck under king George III in 1760, the list is paid in return for the profits from the Crown Estate, the sovereign's property portfolio. The surplus was 210.7 million pounds for the year ending March 2010.

Republic, a campaign group calling for the abolition of the monarchy, said the figures again proved the need for a "full public review of royal finances."

"The British taxpayer is not the personal piggy-bank of the Windsor family.

We must be told whenever they dip their hands into our pockets," spokesman Graham Smith said.

© 2010 AFP

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