Erin Vanderhoof: When Meghan and Harry spoke with Oprah Winfrey back in March 2021, Meghan did something that needed a bit of explanation to many Americans. She called the royal family, the Firm. 

Meghan Markle [Archival Audio]: I don't know how they could expect that after all of this time, we would still just be silent if there's an active role that the Firm is playing in perpetuating falsehoods about us. And if that comes with... 

Katie Nicholl: Prince Phillip used to refer to the royals as the Firm, which makes it sound very businesslike, and it kind of is. Up until this point in the series, we've explored the dynamics that play among the Windsors and their relationships, but the monarchy isn't just a family it's an institution. Monarchy, Inc if you like. It requires teams of courtiers and staff working alongside the principles to keep the palace machines smoothly running behind the scenes. 

Erin Vanderhoof: And it's not a thing the family normally talks about in public. In fact, the term can be traced back to King George VI, Queen Elizabeth's father. He supposedly told a person at Cambridge back in 1920, that the royals are not a family, we're a Firm. Colin Firth uses the phrase and _The King's_ _Speech_ while portraying George VI. 

"The King's Speech" Scene: "This family's been reduced to those lowest basis of all creatures. We've become actors." "We're not a family, we're a Firm." "Yet at any moment, some of us may be out of work." 

Katie Nicholl: While, many European monarchies have fallen over the course of centuries, the British Royal Family has survived for nearly a thousand years and perhaps that's because it operates like a Firm. 

Erin Vanderhoof: To understand the royal family, you really need to understand the business and how it's organized. In this episode, we'll hear from Robert Hazell on how much influence the Queen really has.

Katie Nicholl: And we'll speak with Princess Diana's former Private Secretary, Patrick Jephson, who shares what it's really like to work for the Firm, and Euan Rellie breaks down the Crown's finances and explains just where the money comes from. I'm Katie Nicholl.

Erin Vanderhoof: And I'm Erin Vanderhoff. From _Vanity Fair_ this is _Dynasty: the Windsors._

Katie Nicholl: Episode eight, "The Firm’s Footsoldiers: Who Really Controls the Crown?" 

Erin Vanderhoof: There is quite a lot of money, isn't there? 

Katie Nicholl: Yeah, Erin, there's so much money. Sometimes when people say the Firm, they're just talking about the working members of the family. But behind the big names are hundreds of people who make up the Royal institution. 

Erin Vanderhoof: Those famous Buckingham Palace balcony photos actually work pretty well as an org chart for the Firm. It's headed by the Monarch who stands in the middle. Below the Queen are the core group of working royals. The press calls them the "Magnificent Seven." It's Charles, Camilla, Kate and William, Sophie and Edward, and Anne. They help with the Queen's duties, support the monarchy, and attend royal appearances. And then there are lots of discrete looking faces you might not recognize. Historically they've been referred to as "the men in gray suits." 

Patrick Jephson: This expression "men in suits" keeps being used in a derogatory way to describe, I suppose, courtiers or people like me. I did wear a suit. 

Katie Nicholl: This is Patrick Jephson, who is Princess Diana's Private Secretary. 

Patrick Jephson: But this suggests that there is this rather shadowy organization that makes royal people do things they don't want to do. That couldn't be further from the truth. 

Katie Nicholl: Because courtiers are contractually bound not to speak publicly about what they do there's a lot of intrigue about them. Some of my best sources, Erin, are former courtiers because they have seen the actual workings of the royal family and know how it really operates, which makes their insight so valuable. And while the monarchy is a large-scale organization with the Queen acting, I suppose, think of her as CEO. It's not the case that the Queen is the sole decision maker. Those men in gray suits, although can I just point out that there are lots of brilliant women at the palace these days, they play a really vital role in the day-to-day running of the palace machine. 

Patrick Jephson: The royal household is not a single command and control organization. It's not directed from the top. You might think that the Queen sits at a sort of mission control room and decides where everybody goes and what they do. Actually, it's more of a federation and everybody, more or less, decides how they are going to interpret their duties as a member of the royal family. It is after all a family and family members are left to interpret their roles pretty much without direction from above. 

Katie Nicholl: The most important royals are known as principles, and they have their own households and their own agendas. It's a hierarchy based on the line of succession and the scale of royal work as you might expect. But while the various households have the same goal, which is of course supporting her majesty the Queen, it can get competitive. 

Erin Vanderhoof: These household units are named after the royal residences where their operations are based. The Queen has Buckingham Palace, Prince Charles and Camilla have Clarence House, and Kensington Palace is currently William and Kate. 

Katie Nicholl: But in 2014, it was decided to merge the Clarence House and Buckingham Palace press offices. But shortly afterwards, they went back to operating as two different departments. The idea of being in-house, or in this case in the palace together, made sense financially, but it didn't work. And I think it was because Clarence House has always operated differently to Buckingham Palace. They have different principals, different agendas, and different ways of doing things. I remember being told by one courtier at Clarence House how they would put so much effort into prepping and promoting and engagement compared to Buckingham Palace whose press office would do very little comparatively. When the Queen was turning up, it was a case of, it's the Queen, how much PR do we really need to do? But more time and energy was needed to go into Charles and what he was doing. 

Erin Vanderhoof: So when you look at Buckingham Palace on top, and Clarence House and Kensington Palace and all of that underneath, it's a bit like an umbrella company with a bunch of subsidiary ventures.

Katie Nicholl: Yeah. I think that's a good way of looking at it, Erin. Buckingham Palace is HQ, and everyone answers to the Queen. And it's a business, there's an IT service desk, there's an HR department, budgets, bosses, and a plethora of staff. But, unlike other types of businesses where the main goal is profit, the goal of the Royal Institution is the promotion and smooth running of the monarchy. The Firm's primary function is to keep the Royal. Engine moving. Assisting the royals and completing their constitutional duties and their public engagements. The trickier mission is ensuring the royal family's popularity, which is of course crucial to its survival. And that takes an unwavering commitment to duty from the royals themselves, but also the experience of their highly skilled staff.

Erin Vanderhoof: You mentioned those constitutional duties. One of the elements of this that can get confusing, and it's especially unfamiliar for Americans is a way that the Royal Establishment overlaps with the government. 

Robert Hazell: The Queen has lots of symbolic power, but in terms of real power, she has next to none. 

Erin Vanderhoof: Robert Hazell is professor of government and constitution at University College London. 

Robert Hazell: Famously it's been said that the Queen reigns, but she does not rule. And everything the Queen does she does on the advice of the government of the day. It's been said that she has just three rights: to be consulted, to encourage, and to warn. And she does that in a weekly audience where the Prime Minister, who every week goes to see her one evening in Buckingham Palace, and nobody knows what influence she might have because those meetings with the Prime Minister are completely private and no record is kept.

Erin Vanderhoof: The weekly audience is one main part of the job. The other two are keeping up with government business and attending various events. In that now elusive 1969 royal family documentary, you see the Queen going through her red box of papers thinking about them and signing them before giving an award to poet Robert Graves and going out on the town to greet regular citizens. This is what she does for the government and her family is a part of this too. There are a total of 1000s to 2000 events each year. Definitely something the Queen cannot do on her own. _This_ is what the working royals do. They share this load and divide up these engagements and the people who work for them facilitate this. So this is no ordinary job. How do they even find people who are qualified to do this? 

Katie Nicholl: Well, traditionally, many of the royal aids have come from aristocratic or military backgrounds. Patrick Jephson, for example, followed the military path to join the Wales Household in 1988. 

Patrick Jephson: There is a tribal loyalty between the British Armed Forces and the monarchy. When I joined the Navy, I was commissioned and being a commissioned officer means that you are exercising authority in the name of the Crown. It's more than just a symbolic. The British government exercises military power in the name of the Sovereign. British soldiers and sailors and airmen fight the Queen's enemies, not the Prime Minister's enemies.

Katie Nicholl: After two years as an equerry, which is a military aid who assists a working royal, Patrick moved up to one of the most influential roles in a royal household, Private Secretary. 

Patrick Jephson: The difference between an equerry and a Private Secretary is actually quite significant in Royal Organizational terms. It equates really to Chief of Staff in American terms. You are there to run your royal bosses program, their lives. 

Erin Vanderhoof: And for Patrick, his job came along with many challenges and a lot of excitement. 

Patrick Jephson: Um, as David Puttnam, Lord Puttnam, the Oscar winning film producer said to me, you are the producer of the Diana show. And that's a pretty good interpretation of my job as Diana's Private Secretary. It wasn't entertainment, it wasn't celebrity, it had important constitutional function, but I was there to make it all happen or the converse, if it didn't happen, or if it didn't happen properly, it was my fault. Even if it wasn't my fault. It was, it was one of the perks of the job. You are there to absorb all the bad news as well as, uh, enjoy the good news. 

Katie Nicholl: So the private secretaries are the top tier advisors to the royals. It's a really important job and they are very close to the principals because their job is essentially to strategize and plan. Then there are the communications or press secretaries who deal with PR and the media.

Erin Vanderhoof: It's important to know that even though they are all under the umbrella of the palace to some extent, these households don't always communicate or collaborate. Each principal has their own secretaries and they're employed personally, and really they work on different teams. In fact, sometimes the royals themselves communicate through their secretaries. Which has its problems as well as its benefits. In December 2019, Harry wanted to speak to his grandmother about some of the problems that he and Meghan were having in the palace. He said that he kept trying to schedule meetings with the Queen, but her secretary canceled on him. Katie, it would be like, if you and I just spoke to each other through our producers. 

Katie Nicholl: Which would be very strange. And it was strange, I suppose, as Patrick Jephson discovered when he became Princess Diana's Private Secretary back in 1990. 

Patrick Jephson: Princess Diana, knowing that she and Prince Charles were set on separation, asked me to leave the Navy and join the household permanently to set up and run her off. Up to that point, she had had a shared office with the Prince of Wales. We were supposed to be one big happy family, and now we weren't one big happy family and Diana wanted her own, her own office. She said to me, 'Patrick, we're going to go conquer the world.' And so that made it relatively easy for me to resign from the Navy and start, what I considered was going to be my lifetime's career working for her. She was not, don't forget, uh, always going to be Princess of Wales. She was due to be Queen Diana, and might've been Queen Diana at a moment's notice, and my job was to help her prepare for that role as joint Head of State. 

Katie Nicholl: Preparing someone for that sort of role is no small task. 

Patrick Jephson: Working for Princess Diana was a mixture of really, uh, demanding daily grind. Making a complicated program work smoothly. Diana was... appeared obviously to be very accessible, to be very spontaneous, but that required an awful lot of work behind the scenes. There is this notion that Diana was somehow casual about things like protocol. Gotta correct that, she knew her protocol to her fingertips. What you saw was when she decided to relax it. That was a conscious decision. It was not because she didn't understand the importance of protocol, or its value in promoting her and the royal brand.

Katie Nicholl: When you think of the monarchy, you think of wealth. The Crown jewels, splendid palaces, and estates worth millions of pounds. 

Erin Vanderhoof: Exactly, and without things just wouldn't feel the same. Who would the Queen be without her pearls? 

Katie Nicholl: Well, the Queen may not own all of the finery personally. The Crown jewels, for example, belong to the Nation, as does the royal collection of paintings, which are held in trust for the public. But the Queen controls it and oversees the upkeep.

Erin Vanderhoof: Of course the money to fund all of the work of the monarchy has to come from somewhere, and controversially that includes some contributions from the British taxpayer. 

Euan Rellie: The royal family costs about one or two pounds per person per year. 

Erin Vanderhoof: This is Euan Rellie, a British investment banker who has some firsthand knowledge of the aristocracy.

Euan Rellie: I've I've spent a bit of time at Balmoral and at Windsor and at Buckingham Palace, and I guess I've seen... seen them in action. We used to have the beagles and they'd go and run around Windsor Great Park and we'd go and have tea with the Queen mother afterwards. 

Erin Vanderhoof: Euan has a better understanding of the workings of the royal family than most, and was able to talk us through how the royal finances work.

Euan Rellie: I'm not an apologist for the royal family. I don't think they're perfect at all, but I don't think they are, on the whole, the central members of the family at least are not money-grubbing. They're not trying to accumulate wealth, but I think, I think the Queen has a sense of duty. I think she has unimaginable wealth. Um, but I don't think she would ever try to monetize it. 

Katie Nicholl: The Queen is given a single payment by the government every year called the Sovereign Grant. Now in 2021, this amount was set at 85.9 million pounds. Think about it as the equivalent of £1.29 per person in the UK. Money for the grant comes from the profits of the Crown Estate, a property business owned by the Monarch, but run independently. It's includes Ascot Racecourse, and quite a bit of Regent Street in London. The royal family typically receives 15% of the estate's income every year, and the rest goes to the British treasury. So the grant that the Queen receives, which is called the Sovereign Grant is used by the Queen and other members of the royal family for official expenses. That's staff costs, travel, housekeeping, and maintenance costs. It also covers the upkeep of occupied royal palaces. 

Erin Vanderhoof: In return, there's the argument that they contribute to the wider economy. In other words, they bring in tourists. In a legal filing, the Duchess of Sussex's lawyers estimated that her 2018 wedding to Prince Harry contributed 1 billion pounds to the British economy.

Euan Rellie: So I think that people come to England for sure, because they like a Buckingham Palace and they want to have different royal experiences. Whether it's going and seeing, you know, the Queen's pictures in the Royal Collection next to Buckingham Palace, or whether it's standing outside Buckingham Palace and, and watching the changing of the guard and going and spending money at... having tea at Claridges, or whatever, whatever it is. You know, low, low end or high end, I think, um, the royal family absolutely is perceived as being a draw, um, a commercial draw globally. 

Erin Vanderhoof: But, despite the return, the money from the public alone can't cover the lifestyle that we associate the Queen with. 

Euan Rellie: But, um, but obviously she indulges herself in race horses and things, and so there's some luxury along, along the way. 

Katie Nicholl: Well, this is where the Duchy of Lancaster that's, the Queen's Private Estate comes in.

Euan Rellie: The central ownership that she has is his land and buildings. Uh, and, and she owns a good chunk of the country. The Duchy is basically big tracks of land. What's in the Duchy of Lancaster and what's her own, and you know, in some other holding and what's belongs to the country, I'm not exactly sure how it's divided. And I think that there's some deliberate obfuscation there because I think by tradition as a British person, we understand that the royal family lives in a certain amount of luxury. The pomp and circumstance is central to the whole concept of monarchy. 

Erin Vanderhoof: And to fund this, the money they make needs to be big. The Queen earns around 20 million from these royal properties each year.

Katie Nicholl: It's a huge amount of money, but the Duchy of Lancaster is over 50,000 hectors of prime real estate. Some of which is in London, and the most valuable is the Savoy Estate, which is in the capital. 

Erin Vanderhoof: Then again, the Queen has many mouths to feed. 

Euan Rellie: In some cases she gives a house to her own children. I think people who are in line to the throne are prioritized. And I think there's a sense beyond that, that people are going to have to look off themselves now. 

Erin Vanderhoof: So Prince Charles has been financially independent since he was 21. He has the Duchy of Cornwall. It's a private fortune that he has helped grow into a nearly billion dollar business, but the Queen's three other children have depended on some combination of their mother's largess, government funding, and the money they made in their own careers.

Katie Nicholl: And, Erin, it's just as well the Prince of Wales has made a vast fortune because when it comes to his sizeable entourage, he's quite specific. 

Euan Rellie: Because he likes to travel the world with his harp player, goes with him, and his watercolorist goes with him, and there's a whole retinue of people. 

Erin Vanderhoof: More about the unusual household expenses of the royals after break.

The Firm, also known as a Monarchy Inc. are the public faces of an estimated $28 billion empire. The good will of the people is essential to maintaining that empire, and this is helped along by making sure the royal brand continues to have a strong public image. 

Euan Rellie: I've been involved in a, in a hospice charity in East Anglia, children's hospice where William and Kate, you know, put tons and tons of effort, and actually, I host a dinner for the charity, which was predicated on if you give some money here, you'd be invited to go to the black tie event. And I want to just tell you what it's like to be in that moment where they're giving a party. 

Erin Vanderhoof: Euan Rellie again. 

Euan Rellie: We had this black tie dinner and there were 120 people, and we were told how to divide into groups of 10. And so it was, whatever it is, 12 groups of 10 people and each of those groups had a host and the understanding was half the groups would have 15 minutes with Kate and the other half would have 15 minutes with William and they're really working, right. They're singing for their supper. Very, very deliberately there. Um, spending moments with each of these groups and yeah, it was quite fun talking to William. He's an Aston Villa supporter. We talked about football and you know, that's a magical experience to have that, just that... so they work, they work really, really hard. And you know, whether it's visiting schools or visiting injured serviceman, I think most people in the UK believe that most of the royal family members are earning their keep. 

Katie Nicholl: The royals can't be seen to be a drain on the public purse, and so they make a big show of paying their fair share. 

Erin Vanderhoof: It's why the Queen decided voluntarily to pay income tax starting in 1992. And ever since the '90s, the royals have been much more transparent about their finances, right? 

Katie Nicholl: Yeah, absolutely. They now publish their financial records annually and we get to see every penny and how it's spent. So once a year, I go to a pretty long meeting at Buckingham Palace with the keeper of the privy purse who's in charge of royal budgets. And he takes us, the British press, through every bit of the royal family's expenditure. Now, as you would expect, that goes up with events like royal weddings and important overseas tours. I always look at the travel costs because they're a good indicator of who's been working the hardest, and it's not surprising that most years Prince Charles tops that list with the highest travel expenditure. That's because he works the hardest. Erin did, you know, one of the most expensive forms of travel is the Royal Train. It's apparently the Queen's preferred mode of transport because it's comfortable and luxurious and get this, she has a special stepladder so that her corgis can get on and off the train. 

Erin Vanderhoof: Ah, to be one of those corgi.

Katie Nicholl: I know it's a life of luxury, right? Custom made stepladders no less, but joking aside value for money is key to the monarchy's survival. And it's one of Charles's biggest preoccupations, particularly about the future and why he believes a streamlined monarchy that costs the taxpayer less is the only way that the royal family can really survive in the future.

Erin Vanderhoof: So despite the cost of custom stepladders, the Queen really is known for her frugality. She's actually been known to keep the same barber jacket for decades at a time, occasionally getting it repaired. But the same hasn't always been said about other members of the royal family. Prince Andrew spent so recklessly on private planes that he was actually nicknamed 'Air Miles Andy.' He and his former wife, Sarah Ferguson, only just settled a reported 6.6 million pound debt on a ski chalet in Switzerland. 

Euan Rellie: I think the royal family is, is hypersensitive to not being seen to be too extravagant. Must be a balancing act, right? They have to behave in a way that demonstrates that they are the royal family, but they simultaneously have to behave in a way that demonstrates that they recognize the health and wellbeing. And, and the more limited means of many of the subjects. Kate has had really good press for dressing somewhat modestly. Um, and, and I think there are, there are little tricks that different family, royal family members use to try to seem appropriate. There's been quite a lot of coverage, which is not an accident, about, um, uh, Prince Charles having his suits mended, and keeping his suits for 30 years. Now, again, it's a bit in Congress, right? Because he likes to travel the world with his harp player, goes with him, and his water colorist goes with him and there's a whole retinue of people. Um, but, but, but he likes it to be known that he doesn't want the toothpaste tube to be thrown up. He famously folds the toothpaste tube up to the end, so there's no wasted toothpaste. 

Erin Vanderhoof: So Charles has a harp player, but he doesn't waste toothpaste. Unlike you and me; however, Charles does have a staff that attends to his every need. The legend goes that when he broke his arm playing polo, his trusty valet would squeeze toothpaste onto his toothbrush every morning. 

Katie Nicholl: Well, that might not surprise you that he does actually have a bigger entourage than many other members of the royal family. His mother has been known to take the opposite approach, and I think most people would be surprised by how small the Queen's entourage is and how low maintenance the Monarch actually is.

Erin Vanderhoof: She reportedly goes around the palace turning out the lights just to save money. And when she's not on official duties and not on the royal train, she travels around in relative modesty, in a car. 

Euan Rellie: I've been, actually been to church with the Queen in Scotland, and she has one or two protection officers with her and she drives up to the church in a, in a, um, in a Land Rover. 

Erin Vanderhoof: The Windsors do love to drive their Land rovers. They can look as normal as say their fellow Land Rover fans, the Middletons, and they can look patriotic while they're at it. 

Euan Rellie: And it's very low key. There actually isn't a huge, compared to what you'd see with a, with a politician traveling in the US, um, they pride themselves on being a bit understated in that regard.

Katie Nicholl: And the reason for this need to prove they're deserving of public funds, well, like so many things we've raised so far, you can bring it back to Diana. 

Euan Rellie: I think Diana changed everything actually. And I think, I think Diana was the first one who said it's really important that we modernize and act more like human beings who have jobs otherwise we won't be accepted forever and nor should we. And that was very painful, even for the Queen, for sure. You know, I think actually it's probably the best thing that ever happened to the royal family, because if there hadn't been a Diana, then, uh, then the whole enterprise would have been seen as entirely illegitimate by a bigger portion of the population.

Erin Vanderhoof: The loudest advocates for changing the Firm are an ocean away, and they're engaging in a bit more consumption now. But after Meghan and Harry spoke to Oprah, plenty of people behind the scenes objected to their portrayal of the Firm and even the factual basis of their complaints. I know that team Sussex was more sneakers than suits, but do you have any insight into exactly what went wrong between the couple and the palace staffers, Katie? 

Katie Nicholl: Have you got an hour for another podcast, Erin? I think ultimately they didn't like being dictated to by the Firm. They wanted their own household, which they got, but they didn't like being under the control of Buckingham Palace.

Erin Vanderhoof: It honestly sounds a lot like the work situation at Kensington Palace in the 1980s. Before Diana joined the family, Charles, his staffers were already pretty frustrated with his disorganization, his like overly broad set of interests, and his tendency to go rogue in confrontational speeches. But after the wedding, everything got so much worse. Staffers resented the way that they were dragged into the couple's discord, and after a few years, a handful of Charles's longest serving courtiers resigned, and the marriage just kept getting worse. The metaphor of "men in suits" or the shadowy halls of power just fall flat when you recognize that all of these jobs, regardless of their particular roles and titles, come down to making the royals look good. And I think that this speaks to the true nature of the royals' power. It's foundation rests on the shifting sands of public opinion, and everybody from the Queen down to the palace's social media managers understand that. 

Katie Nicholl: That's the not so easy job of the palace PR team. The comms office's chief role is to protect, preserve, and promote the royal family and its image, which is everything. But even with all their wealth, and the best courtiers money can buy, there were some problems money just couldn't fix. 

Erin Vanderhoof: In the next episode, we'll take a closer look at Prince Andrew, the Epstein scandal, and more problems that money can't solve.

Julie K. Brown: I think it already has really tarnished them. I mean, they are scrambling. I don't think they know how to handle it, and they haven't handled it very well. I mean, the fact that he did that interview where he made certain denials that have since been proven false, I mean, it shows you that they have not only a public relations problem, but they have a credibility and truth problem.

Katie Nicholl: All that on the next episode of _Dynasty: the Windsors._

Erin Vanderhoof: _Dynasty_ is hosted by Katie Nicholl and me, Erin Vanderhoof and is produced by _Vanity Fair _in partnership with Somethin' Else. Lizzie Jacobs is our executive producer. Darby Dorras and Bryant Urstadt are our editors. Rob Dozier, Zoe Edwards, Cheeka Eyers and Sylvie Lubow are our producers. 

Katie Nicholl: Ginny Bloom is our showrunner. Basak Erten, and Jessica Jones are our associate producers, and Ike Egbetola, Lily Hambly, and Peyton Hayes are or our production coordinators.

Erin Vanderhoof: This episode was engineered by Josh Gibbs and the theme song was composed by Woolly Music. Fact-checking was done by Sara Krolewski. _Dynasty_ was conceived by _Vanity Fair_ Executive Editor Claire Howorth. Claire and Katie Rich are our staff editorial consultants. Thank you to our guests, Patrick Jephson, Robert Hazell, and Euan Rellie.

Katie Nicholl: If you love the show, be sure to rate, review and follow on Apple Podcasts, Spotify, Stitcher, or wherever you get your podcasts. For more _Dynasty_ visit vf.com/dynasty and you can follow _Vanity Fair_ on Instagram and Twitter @vanityfair.