ROYAL FLUSH: Two funerals and a jubilee make it a testing year for the Windsors

ROYAL FLUSH: Two funerals and a jubilee make it a testing year for the Windsors - Is it churlish to ask: are they good for business? Do they help us win foreign deals, and does UK tourism depend on them? In search of answers, Stephen Cook meets some firms

by STEPHEN COOK
Last Updated: 31 Aug 2010

Is it churlish to ask: are they good for business? Do they help us win foreign deals, and does UK tourism depend on them? In search of answers, Stephen Cook meets some firms that rely on The Firm.

How much is our Queen worth to us? How long is a piece of string?

When the proposal came up to replace parts of the royal train some years ago, the Treasury was asked to help by producing a cost/benefit analysis.

No can do, said a senior official in a reply now filed away in the Public Record Office: the costs were clear enough, but there was no way of assessing the benefits - at least, not in financial terms.

And that, in a nutshell, is the problem we face when we try, in this Golden Jubilee Year of Her Majesty Queen Elizabeth II, to work out what the royals actually contribute to the British economy. It's a situation made even more uncertain by the death of the Queen Mother. A few companies and industries will hazard a figure or two, but nobody is willing to put a global sum on it.

Commentators on the royals will invariably give competing assertions that are hard to prove either way. The royals are vital to the export drive, says one camp. Don't be silly, says the other - nobody, these days, awards a multi-million pound contract to the UK just because they've had a smart dinner with the Prince of Wales.

But there are a few tentative conclusions I came to in the course of researching this article: some companies would probably shrivel or fold without the royal family. In addition, Queen and Co plays a subtle part in maintaining an image of Britain that gives us a marginal advantage in certain overseas markets such as the Middle East and the Commonwealth, and perhaps also the US.

At the same time, another conclusion that emerges is that abolition of the monarchy would not deal a mortal commercial blow to UK plc. The City would probably not blink, and even the pounds 11 billion tourist industry thinks it could probably cope with the resulting change to Britain's identity.

And besides, any decision to ditch the royal family would be taken on social and political rather than commercial grounds.

Let's look first at the jubilee celebrations, to see what they can be expected to yield commercially. According to Robert Lacey, author of Royal, regal jubilees have always been a peculiar mixture of loyalty and business, and he thinks this one will be no exception. The real commercial test will come between the start of the Queen's regional tours at the beginning of this month and the close of the extended jubilee weekend of 1 to 4 June.

A small avalanche of commemorative china, glass, beer, whisky, biscuits, bricks, coins and thimbles has been tumbling out of the factories, and five companies we spoke to were confident that the celebrations were going to boost their turnover by between 2% and 40%. A nice little earner - although none of them was so vulgar as to put it quite like that.

A pointer to the boost to the economy from such sales comes from the Commemorative Collectors Society, which carries out audits after big royal events. Its secretary, Steven Jackson, says the wedding of Prince Charles and Lady Diana Spencer in 1981 brought sales of pounds 881 million - about pounds 2.15 billion at today's prices - and the Queen's silver jubilee in 1977 turned over pounds 660 million: about pounds 2.6 billion in today's terms.

Despite the tarnishing of the Windsors' reputation since then, it's quite possible that a similar figure will be achieved this year - perhaps with a further boost from the mourning of the Queen Mum. To this can be added the little bit extra that firms will rake in from royal visits, tree plantings, beacon lightings, firework displays, barn dances and events and exhibitions with names like 'Orb and Sceptre' and 'England be Glad'.

But what does that amount to in an economy whose gross national income at market prices in 2000 totalled more than pounds 950 billion? Not a lot, we may conclude. And so we turn to the second and related question: what do the royals do for the economy in an ordinary year, leaving aside the special boost from the jubilee to the makers of mustard and shoe polish?

This is a harder one to unravel. We simply can't be sure, for example, whether or not a recent agreement between Airbus and South African Airways had anything to do with the participation by the Duke of York in a trade delegation to South Africa a short time before.

Nevertheless, there are a few indications, and they suggest that royal-related employment and taxation revenue from certain industries makes up for the cost to the taxpayer of running the monarchy and its palaces.

This is currently pounds 35 million a year, excluding policing and security costs, or less than pounds 1 a head - about the same as a warplane, says Robert Lacey, or running the Victoria and Albert Museum.

One of the pointers comes from the British ceramics industry, which turns over pounds 1.2 billion a year but has been badly hit by cheaper foreign competition.

It would take another serious knock if it could no longer make 'ornamental ware' decorated with the faces and symbols of royalty or trade off the image of reliability that the royal family still represents.

'It's difficult to quantify their value,' says Chris Hall, public affairs director for the British Ceramics Federation. 'But the effect of their loss would be measurable and significant. There are events like the jubilee, but the ongoing effects shouldn't be under-estimated. 'British' is a brand in itself from which everyone benefits, and if you took away the royal family and its pageantry it would detract significantly from that brand.'

The British Tourist Authority is making the most of the jubilee in its campaign to bring a million more visitors to the UK this year and compensate for the damage from foot and mouth disease and the effects of 11 September.

The industry employs 7% of the UK workforce and attracted 23.4 million foreign visitors last year, who spent pounds 11 billion - so there's plenty at stake. Its pitch for the extra visitors is encapsulated in a fold-out Royal Heritage map, complete with foreword by Prince Charles, showing 50 places in the UK associated with royalty. 'Our core strengths are heritage, history, and tradition,' says Jeremy Brinkworth, head of campaigns at the BTA. 'It's not specifically the royal family - more a cumulative sense of keeping the past alive.

'Without the royal family, there'd probably be little difference in the first few years. In the longer term it would be harder to sell to the US, but I don't think the difference would be drastic. It would depend a lot on whether we continued to care for our heritage in the broadest sense - that's something other people really admire about us.'

Another royal contribution was noted in a recent book by Anglophile Yale academic Frank Prochaska, who concluded royal patronage was worth between pounds 100 million and pounds 200 million a year to the fundraising of British charities.

'That alone is three to four times more than the highest estimates of the cost of the royal family,' he says. 'The Prince's Trust also makes a big contribution. But the role of the royals in the export drive, if any, is pretty impenetrable.'

However, CBI chief Digby Jones doesn't doubt their export value. 'I go round the world all the time, and it's clear that when there's a royal visit, goodwill is increased and UK businesses have a better chance of winning orders,' he says. 'Britain has to sell on more than just price, and the royal family provides added value.'

This view, widely held in British industry and among pro-royal commentators, may be dented by the death of the Queen Mother, which leaves only one top royal untouched by divorce or scandal - the Queen herself. It's a view treated with scorn by Liberal Democrat MP Norman Baker, one of 20 members of the All-Party Parliamentary Republican Group.

'If someone rolls up in your country and says: 'I'm from Britain and I've got a handle', you don't start acting like a rabbit in the headlights and signing up willy-nilly,' says Baker. 'No-one does multi-million pound deals like that.

'The financial arguments in favour of the royal family don't make any sense, and the best argument in their favour is that there's no better alternative.There's a strong case for abolition, but it's about number 183 on my list of priorities and I would settle for them becoming a more modern monarchy, more in keeping with modern life.'

The signs are that the royal family, increasingly adaptable as it feels threatened, is settling for the same thing. A reform of royal finances headed by Sir Michael Peat has brought down expenditure and pegged it for the next 10 years, and the move to hold a jubilee pop concert in the grounds of Buckingham Palace is seen by many as astute.

'Don't underestimate the capacity of the British monarchy to adapt,' says Robert Lacey. 'Remember how the Queen refused to lower the flag on Buckingham Palace for the death of Diana, but when she realised the strength of feeling she did a volte-face.'

Even so, with opinion polls saying The Simpsons are more popular than the Windsors among young people, the future of the monarchy remains far from secure. Norman Baker thinks it should be open to every citizen to be elected head of state, but could we really be bothered with all that this would entail? The more astute money appears to be on the survival of a scaled-down version of the Windsors, driving Jags instead of Bentleys, and continuing to play a small and somewhat nebulous role in keeping the economy afloat.

SAMPSON SOUVENIRS

Tankards, tumblers, keyrings, bookmarks, thimbles, spoons - Sampson Souvenirs of Southend-on-Sea supplies them to all kinds of outlets, from posh hotel shops to trinket stalls. Spoons carrying the heads of Queen and Co are normally the company's only royal product, but this year there's a jubilee version of nearly everything and co-owner Stuart Hardingham reckons that could put as much as pounds 200,000 on Sampson's annual turnover of pounds 5 million.

'The jubilee's going to be good for us,' he says. 'Things are really selling well, and one of the best orders has been to the US - Americans seem to have adopted our royal family, haven't they? With the general effect of the jubilee, I reckon our sales could be up between 7% and 10% in total.

If we didn't have the royal family our turnover would probably drop quite dramatically, simply because they help to bring so many tourists over.' Sampson Souvenirs is probably the UK's largest souvenir distributor.

About a quarter of what it sells is made in the UK and the rest in the Far East - although most of the jubilee range has been made in Britain, says Hardingham, to get better quality.

ROYAL WORCESTER

Got pounds 149 going spare? Then how about a nine inch high, hand-painted figurine of the Queen in a limited edition of 1,000 from Royal Worcester, manufacturers of fine china since 1751? The company has held a royal warrant since George III awarded it one in 1789, the year of the French Revolution, and employs 550 people in its factories in Worcester. Since last summer, it has been selling 10 lines designed to commemorate the golden jubilee: as well as the figurine there is a bowl, a coaster, a candlesnuffer and a range of giftware using an 1807 design for the then Prince of Wales.

David Benjamin, Royal Worcester's deputy managing director, won't reveal the company's turnover but says the jubilee products have sold well. 'We're hoping they will bring a significant boost to our overall sales volume in 2002. We're huge supporters of the royal family, we value our relationship with them, and we benefit from the role they play as ambassadors for this country.' The company places equal value on its relationship with Jamie Oliver, who put his name last year to a range of Royal Worcester oven-to-tableware, which is also doing well.

ADNAMS

Under the lion and unicorn on the beer pumps serving Adnams Jubilee ale is a logo that seems at first glance to read: 'Land of Hope and Glory.' Look more closely, and you see that it actually reads: 'Land of Hops and Glory' - a clever marketing touch and typical of our irreverent 21st century attitude to the monarchy.

'This ale will be terrific and has a similar recipe to our Millennium brew,' says Adnams chairman Simon Loftus. 'We're expecting that it will increase beer turnover by about 2%. It will take some sales off our existing beers and other brands, but we will probably pick up a few who might otherwise drink lager or Guinness.'

With its brewery, wine business and a brace of hotels, Adnams dominates the Suffolk coastal town of Southwold, employing 280 people and turning over about pounds 35 million a year. Although Loftus is expecting a commercial boost from the jubilee, he's sceptical about the role played in the economy generally by the royal family. 'If we didn't have the royal family we would invent some other pomp and ceremony to fill its space, if only for gross commercial reasons,' he says. 'And there would still be national celebrations that would give us an excuse for a celebration beer.'

FLYING COLOURS

Flying Colours is a medium-sized firm that employs 10 people making flags in the north Yorkshire town of Knaresborough. Andy Ormrod, one of the partners, expects turnover to be up by 30% to 40% because of the golden jubilee this year. 'The Queen's going to more than 100 places around the country between May and July and there's going to be a lot of blue, white and red about,' he says. 'There'll be union flags, bunting, the lot. Much will depend on the weather, of course, but orders are coming in and I think it's going to be a goer.'

Royal events like weddings and funerals always bring a surge of work for flagmakers, he says, as do big sporting events like the World Cup and times of conflict like the Falklands or the Gulf War. But he doesn't think his business would suffer unduly if Britain got rid of the royal family and became a republic. 'Countries without a monarchy are often very big on national flags - often bigger on them than we are now.'

FORTNUM & MASON

Mention Fortnum & Mason and the reply comes back: 'Oh, the Queen's grocers.' The famous store in Piccadilly holds several royal warrants, including ones from the Prince of Wales and the Queen. Managing director Stuart Gates says there's no doubt this draws in the customers.

'It's very difficult to judge what percentage, but the heritage of the royal family and a business such as ours go hand in hand. It's a tradition, and that's something we do very well here.' For the golden jubilee, Fortnum's has produced two limited-edition tea caddies for pounds 8.95 and pounds 9.95, a tin of biscuits at pounds 8.95, and a celebration cuvee Champagne for pounds 24.95. There's also an exhibition of the history of the monarchy, selling items between pounds 12.50 and pounds 11,500, and the shop will open throughout the jubilee weekend of 1 to 4 June.

'There's very strong interest in the biscuits - our grandmothers all had various royal biscuit tins, didn't they?' says Gates.

Fortnum's turns over pounds 42 million a year and employs 450 people. Gates adds that it would be lovely if the golden jubilee year boosts business by 5% to 10%.

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