How The Monarchy Can Make You Millions

13 December 2015

•           Shadow leader of the House of Commons calls for £4bn system of royal warrants to be overhauled;

•           Dozens of companies which hold royal warrants benefit from corporate structures with bases in tax havens including royal “crown” jeweller Mappin & Webb

•           Several firms have closed UK factories and no longer make their royal warranted products in the UK

•           Royal warrants are used on products high in sugar and marketed at children

•           Royal warrant given to firm that makes guns used to kill elephants and other big game hunting.

Royal warrants have been granted to companies for centuries and a regal seal of approval can be hugely valuable but an investigation by Channel 4 Dispatches has led to calls for the warrant system to be overhauled.

The Queen, Prince Philip or Prince Charles can grant a warrant to a company whose products have been used by the royal household for more than 5 years but the process is far from transparent.

For the past two months Dispatches has been scrutinising those companies with royal warrants

- an award that allows firms to put a royal coat of arms on their product stamped with the words ‘by royal appointment.’

City firm Brand Finance estimate royal warrants are worth £4.5bn to companies with the royal seal of approval. They claim firms with warrants are able to charge more for their products and generate a higher volume of sales into the future.

The programme – led by reporter Antony Barnett - discovered that a number of the royal family’s favourite firms are owned by companies that could benefit from offshore tax havens. These include royal “crown” jeweller Mappin & Webb whose parent company is based in Luxembourg.

Mappin & Webb holds warrants from the Queen and Prince Charles as royal jeweller, goldsmiths and silversmiths. In 2012 the Queen appointed Mappin & Webb’s master craftsman the prestigious role of crown jeweller whose job is , among other things, to prepare the jewels for the state opening of Parliament. Dispatches traced Mappin & Webb’s parent company to the controversial tax haven of Luxembourg and reveals how it is using complex financial methods that could reduce the tax it pays in Britain. Prem Sikka, Professor of Accounting at Essex University, scrutinised the firm’s accounts and calculated that its legal use of offshore tax havens has cut its UK tax bill by £3m in the last two years. There is no suggestion that the company is doing anything illegal however Dispatches asks if it’s appropriate that the company hold a royal warrant.

Mappin & Webb told Dispatches: “Mappin & Webb… …act transparently and responsibly in all our tax affairs… …Mappin & Webb and the Aurum Group are fully resident in the UK for tax purposes and always have been.”

Dispatches also found that several of the royal’s favourite brands with warrants have closed production in the UK and moved it overseas. Some of these include Hunter wellies, Bendicks Bittermints, HP Sauce and Pringle of Scotland.

Shadow leader of the House Chris Bryant, who campaigned to get Burberry stripped of its warrant when they closed a factory in his Welsh constituency, told Dispatches:

The whole point of a Royal Warrant is it’s a kind of statement of British satisfaction and it must add phenomenal value to a brand especially overseas in markets like China, the far east, the middle east - and I think that it should underline modern British values and that means it should be a company that pays taxes in this country, employs people in this country, does most of its business in this country

Bryant added: It’s a statement of Britishness which I think in a way doesn’t belong to the Royal Family…it belongs to the whole of us as citizens, and subjects of this country.

An opinion poll conducted for the programme revealed that 68%of people asked said royal warrants should only be given to companies whose products are made in Britain and more than three-quarters said they should not be given to products whose owners are based in tax havens.

The programme also reveals how Kellogg’s, the US firm that has a royal warrant from the Queen as ‘purveyors of Cereals’ legitimately puts royal warrants on many of its products including those high in sugar and marketed at children such as Pop Tarts, Coco Pops, Kraves , Rice Krispie cereal bars.

Dispatches also considers gunmaker Holland & Holland which has a royal warrant from Prince Charles and discovers the firm sells rifles that could be used for big game trophy hunting including the killing of lions and elephants. Whilst there is nothing illegal in this Dispatches notes that both Prince Charles and his son Prince Harry have been outspoken against the ivory trade and threats to endangered species.

On calling for the system of granting warrants to be overhauled, Chris Bryant said:

There’s a great cloud of unknowing…... I think it should be transparent…If I ran a British company now I’d be desperate for it to get a Royal Warrant, from any one of the members of the Royal Family who can grant them now. But when William and Harry come along, and they start to be able to issue Royal Warrants, that value will go up exponentially. And that’s why I think even, before we get to that point it’s all the more important that we have a proper review of the process so that it’s open and transparent and the whole of the country- the subjects and citizens of this country, get to understand how these things are awarded.

Made in Britain

Royal warrant firms that have moved all or most of their production overseas include:

•           Bendicks Mints of Mayfair which is now made in Germany

•           Parker Pens who have moved all operations to France

•           Pringle of Scotland which is now made entirely in Asia

•           HP sauce which is made in the Netherlands

 

In a statement to Dispatches, the Lord Chamberlain’s office said:

Standards are monitored, and any credible allegation that a warrant holder was acting unlawfully would result in an immediate review and may lead to a warrant being cancelled. It would be a breach of commercial confidence to reveal the details of those who were not successful in applying for, or retaining, a Warrant.

The Royal Warrant Holders Association told Dispatches they do not comment on the operations of specific warrant holding companies and the system is monitored for compliance on an on-going basis.

Regarding firms which move production overseas, the Association said these are commercial decisions made against the backdrop of a global market… some warrant holding companies have decided to relocate production and other functions to the UK.

 

How The Monarchy Can Make You Millions: Channel 4 Dispatches, Monday 14 December at 8pm