Why Beatrice and Eugenie living rent-free is a risk for the royals

0:02Sky News, the full story first.

0:11Despite not being working royals, Andrew Mountbatten-Windsor's daughters have been living in Crown properties rent-free. And this is why.

0:37They're best known for being the daughters of Andrew Mountbatten-Windsor and Sarah Ferguson. Princess Eugenie. As young working women in the public eye, we've had to learn some lessons the hard way. And Princess Beatrice. Growing up in the public eye means that every embarrassing, slightly awkward growth spurt or hilarious fashion moment are published around the world. And it isn't just unfortunate haircuts or outlandish wedding hats. They're back in the news thanks to a National Audit Office report on their palatial accommodation and who pays for it. Today, though, we're going to try and look beyond just those headlines because despite the huge interest in them, technically they're not working royals.

1:20And many of the controversies they've been dragged into have been the fault of their parents. So who are Eugenie and Beatrice? What are they? in the context of the House of Windsor? And what do they tell us about the modern monarchy? Our Royal Correspondent is Laura Bunda.

1:38Let's start with that National Audit Office report. What have we actually discovered about their sleeping arrangements? We've discovered a lot, actually. I mean, what strikes me is how is it two decades since the National Audit Office were asked to look into royal finances, this immensely complex and some would say slightly murky, opaque world. Anyway, in terms of the princesses, what we have learned is that the two of them, since 2008, have been able to live rent-free in royal palaces. Now, they used to share a pad in St. James's Palace, then usually moved to Kensington Palace in 2018, where she lives in Ivy Cottage or does when she's not in her Portuguese villa.

2:25Beatrice has remained having access to that apartment in St. James's Palace. Now, we know from this document that it is the king who is picking up the bill for their rent. He is personally paying for that, honouring or continuing an arrangement that started with the princess's grandmother, Queen Elizabeth. She decided she would pay for it. Now, there's a weird thing with the royal household because these palaces lie within tight security zones, security cordons. There's a deal whereby you can't get any old Tom Dick and Harry renting out an apartment there because of the vetting process. So the rent gets adjusted usually to 60 % of the going market value.

3:10But what's wrong with that? I mean, rich uncles have paid for their nieces' accommodation since time immemorial. I suppose it relates to the fact it's a cut price rent that they're getting, but also where the money that Charles is spending comes from. There's no rule that has been broken here, but it does great, doesn't it, slightly. The bigger question here, I think, is why are they getting this deal? Okay. They both have jobs. They both got pretty wealthy husbands. They have cousins who are also nieces and nephews of the king who don't get this. They're not working royals. There's no public role for them in terms of the taxpayer funding of being an official working royal.

3:50So how come they're getting this privilege? See, this is what fascinates me about this entire story. Because as you say, they are princesses. They have the HRH title. They are in the line of succession, but they are not what is known in inverted commas as working royals. How does that work? Yeah, it's a weird one, isn't it? So, I mean, a working royal is basically a senior member of the royal family whose job is to carry out work on behalf of the royal family, on behalf of the country. So, you know, you can think of the obvious ones, the king, the queen, William and Kate, working royals. And that comes with, you know, access to the funds that are paid by the state and security provided by the state, presumably.

4:29Yes, exactly that. So, comes from the sovereign grant, basically. The sovereign grant pays for the work that they do. And there are some random ones in there as well you might not know. It's not a big pool, the working royals. So William Kate, King and Queen. You've got Edward and Sophie, Duke and Duchess of Edinburgh. You've got Princess Anne. Know her. And then you've got the Duke and Duchess of Gloucester. You might recognise them, but they are working royals. You're shaking your head. You've got the Duke of Kent. No. And you have Princess Alexandra as well. So they're the ones that we pay for because that they carry out official duties.

5:07Now, it's weird with the non-working royals because there are some big faces and big names there. And I think these princesses, Beatrice and Eugenie, are very well known, aren't they? They're high profile. They are HRA. They've got all the titles. They've got the style, but they don't have the royal role. So they do occupy this rather curious position, in some ways kind of half in, in some ways kind of half out. Professionally, though, I mean, they have ploughed their own furrow. Let's start with Beatrice. I mean, what's she like? What does she actually do? She has a job. She works for a software company.

5:41She went to university. I mean, she was brought up in, you know, in grandeur though. She had all the trappings of a royal lifestyle. Parents who famously divorced and famously were supposed to be happily divorced. I would have said up until anything relating to her father, the girls were really popular. We know they were very close to their grandmother. but yes Beatrice is an interesting one because she is also a councillor of state. What's that? So okay so the king has people the monarch will always have people who can deputise for them so she automatically became one when the queen died because she bumped up the list because the king was no longer one because he was now the monarch.

6:23Okay so when it comes to Beatrice we have a professional life we still have a kind of an active-ish sort of role within the royal family that you've just been describing. What about Eugenie? What does she do day to day? I mean, again, she has had to kind of plow her own furrow, hasn't she? Yeah, well, she's pregnant at the moment, so she will be becoming a mother for the third time. She did, like her sister, she went to university. She did a degree in history of art in Newcastle. She has a job in an art gallery. She has a husband whose job has taken them to Portugal. So they live on the Portuguese coast in a villa.

6:53She has charitable interests as well as her career on the side. She's also got two young sons as well, so she's busy. But in terms of her royal life, she's a member of the royal family, but she's not a working royal. Personality-wise, what are they like? I mean, do they compliment or contrast? You don't ever hear anything bad about them. They're meant to be really good fun. They're meant to be, you know, very loyal to each other, very loyal to their parents. And certainly, I think with Eugenie, we know she's very close to Prince Harry. She's very close to her cousin. you don't get a bad press.

7:28But obviously by association, that has been changing. Because of course, any discussion of Beatrice and Eugenie cannot avoid discussion of their parents, Andrew Mountbatten-Windsor and Sarah Ferguson. I mean, they did divorce when they were pretty young, but they always gave the impression that family came first, that actually the family unit remained pretty strong. Yeah, I think everyone would agree on one thing when it comes to the Yorks. I mean, dysfunction, weird relationships to one side. They were a tight family unit. And regardless of what Fergie and Andrew were getting up to and the battle within the House of York and what was going on there, they were a tight knit family.

8:09And I think you would now look at William and Kate and how they're bringing up their kids and think it's more aligned perhaps to that. But they were a close family. There were bits in their lives where you can see that the associations their parents had with questionable people did bring their daughters closer to those things. I'm thinking of Beatrice's 18th birthday party, which was a masked ball at Windsor Castle in 2006. It wasn't a small guest list, there were hundreds there, but there also were Jeffrey Epstein, Ghislaine Maxwell and Harvey Weinstein. They were all invited. Wasn't there another birthday party that got brought up in that infamous Newsnight in tribute with Andrew and the Pizza Express in Walking.

8:50And that was Beatrice's birthday, I think, again. She was attending a birthday party. So in the Newsnight interview, and there were many bizarre moments in that interview, weren't there? This was definitely one of them where Andrew said he remembers specifically the date that he was alleged to have met Virginia Giffray. He couldn't possibly have been there because he remembers he had to drop Beatrice off at a party at Pizza Express in Woking. This is the Virginia Dufresne that the royal household paid double digit millions to settle a civil case elsewhere, wasn't it? And Andrew has and continues to always strongly denied any allegations made by his accuser.

9:31But yes, she was his accuser. So Andrew says he remembers picking Beatrice up from a Pizza Express party. For me and you, for many people picking your kids up from a bouncy play centre or something, we do all the time. He remembers it because it was an unusual thing for him to do, he said. And he remembers that they used to share and split childcare duties so much so that Fergie was away, so he was at home with the kids. That formed a big part of his answer as to why he didn't think and claims he hadn't met Virginia Dufresne. It seems to me that there are two things happening in parallel here.

10:09On the one hand, the reputational damage that Andrew and Sarah Ferguson's continued relationship with Epstein would have on their children just in and of itself, noting, as you just have, that Andrew denies all wrongdoing. But there are also the times, like with that Newsnight interview and other occasions, where both parents seem to draw them into the controversy to actively make them part of it. Yeah. And I think you also have to look at how old the girls were when things were going on. And if you look back to the Newsnight interview, Sam McCullough, the woman who sort of set up the interview, who's written the book that's been the show made as well, has spoken about Beatrice's involvement in that interview, describing her as the rainmaker, that she was on the lookout for Andrew as they were sort of negotiating how it might play out.

11:01She was meant to have been devastated as well after the interview aired, but she was involved in some way. Sam remembers it that she turned up at one of the meetings at Buckingham Palace when they were sorting out, how would it be? How will we do this interview? What will it be like? From a point of concern for her father to make sure it was okay. I think as a young woman, she would have known there was reputational risk at stake here. She obviously was aware of the interview. I'm not saying she totally supported and wanted it to happen, but she was very much there when the negotiations were taking place.

11:37She was also there along with her sister when Sarah Ferguson took a trip to the United States to meet Jeffrey Epstein. When was that? That was shortly after he was released from prison, wasn't it? Yeah, five days after Epstein was released from prison. They weren't kids at that point? No, they were 20 and 19. It was the summer of 2009 and the emails show a number of conversations backwards and forwards. But basically, Sarah Ferguson took her daughters for a lunch with Jeffrey Epstein and they were 20 and they were 19, the same age as maybe older than some of Epstein's accusers, some of Epstein's victims.

12:18And that's difficult.

12:35Are Beatrice and Eugenie, are they a force for good within this modernising kind of 21st century version of the House of Windsor with more changes coming down the line when Charles hands over to William? It depends, I suppose, if and when William takes over from the king, He will want to do things his way and he will have to decide at that point, whenever that point comes, is there a role for the two sisters, his two cousins in the monarchy that he wants to lead and he wants to run? His children could well be a lot older by them. I think a lot had been said up until the whole Epstein scandal as to whether there should be a role for them because they were seen as a force for good now.

13:20But I think by association, their reputation has been tarnished. It's hard to see how on earth there can be a role for them in the future, especially in William's future. If there isn't a role for them, why on earth should they enjoy the privileges that come with the HRH title? Are we perhaps making a problem for ourselves in referring to working and non-working royals, when actually perhaps the distinction should be between public and private figures? Because they're certainly not private figures. No, no, they're not. It's a hard one, isn't it? And I think it is important to look at what their cousins do to see how it can be accepted.

13:59So if you look at Zara Tyndall, for example, Peter Phillips, they both have pretty lucrative careers, especially Zara with sponsorship deals and the like. Deals that, okay, she was within her own right, a very accomplished equestrian, but would she have got those deals without the Royal Association? That's always going to be the issue. Doesn't our discussion raise questions about the rest of them as well? We've mentioned Princess Alexandra already. She paid hundreds of thousands, as I understand it, hundreds of thousands of pounds for a lease back in the 90s, not in perpetuity, but well beyond her lifespan and well beyond, you know, ours combined, on a massive place in the middle of Richmond Park.

14:37And I haven't a clue who she is. Why should these arrangements continue when actually you look at what these royals are doing. They're not contributing anything to public life. Doesn't this just bring us back to the same question we asked at the beginning? Why on earth should these rich, rich individuals be getting handouts? I think that is the big issue. Don't think, just because we've had this report, nothing is going to happen. Because I think what we've seen in the last year is something starting to happen. The Public Accounts Committee wanted to get their hands on Andrew's lease of Royal Lodge.

15:12They got that. They then wanted the National Audit Office to have another look and find out exactly what they could about the deal with the properties. That committee is now going to wait for the Crown Estate Annual Accounts, which will be out end of June, maybe beginning of July, say. Then they're going to start their investigation because I think there is a massive change of tide amongst MPs and amongst members of the public that they want. It's all very well for the palace to say, we are committed to transparency, but I think there is a lot that remains particularly murky and opaque about the finances.

15:55It's not just me saying that, it's MPs now. If you've got the Public Accounts Committee having a thorough look at this, I think things could easily change. And what we're discussing now will be the basis. The National Audit Office, it's not their role, is it to say, it's value for money. It's working well. That's not what they do. They're auditors. But the Public Accounts Committee can dig further. They can make recommendations. And I think we can expect senior palace staff to be called to give evidence and discuss all this. But not only that, What the Public Accounts Committee could also do is then ask auditors, let's look at value for money.

16:33And that is when the answer to that question, I think, will get a bit closer. But do you think, given the negative press, we are going to see Eugenie and Beatrice stepping back from public life? One thing I've always found interesting is how the palace goes out of its way to distance them from what's going on with their parents. So the invitations to Christmas at Sandringham, for example, where it's made very clear they're not working roles, but they're members of this family. So they're not just HRH. They are a niece. And I think that's what the palace wants to do. Does the public accept them being splashed at fancy parties in London?

17:13Less so. Much less so now, I would say. Let's see where it goes. Laura, always good to chat to you. Thanks very much. do remember to get in touch with your thoughts on today's episode or any ideas that you might have for topics to cover in the future the email address why at sky.uk we are back again Monday