Royal family members take taxpayer-backed loans during pandemic - which royals made claims
British taxpayers may be forced to foot the bill for the Princess of Wales’ parents coronavirus loan after the company went bust
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Several members of the royal family claimed taxpayer-backed loans during the Covid-19 pandemic. The news follows the collapse of the Princess of Wales’ parents party firm which will leave taxpayers footing the bill.
Carole and Michael Middleton claimed a loan from NatWest, which was backed by the taxpayer, during the lockdowns when having parties was banned. The couple set up their company Party Pieces in 1987, after Carole struggled to find party supplies for Kate’s fifth birthday party.
The Times has reported that the company is now going through an insolvency process and owes the bank £220,000. Party Pieces has been sold through a pre-pack administration deal, which is an insolvency procedure that allows a firm to sell its assets to a buyer before administrators are appointed.
The deal has been made with entrepreneur James Sinclair for £180,000, which is £40,000 short of what the company owes for the loan. This means that the taxpayer is liable to cover for 80 percent of what is owed to NatWest under the terms laid out by the Government’s coronavirus business interruption loan scheme.
Carole Middleton reportedly stepped back from day-to-day management of the firm back in 2019, but continued to appear as a brand ambassador and a director of the business. She reportedly also stepped up in her involvement in the company at the start of the year, in hopes to secure its future.
However the repercussions of the pandemic have proven catastrophic for the party company, with the owners calling in restructuring firm Interpath. Advisers have since approached more than 175 buyers to try and save the company.
Party Pieces received one offer that would have been able to cover the debts but it could not be completed despite “significant effort”. Party Pieces revenue had dropped to £3.2 million, losing £1 million in 2022.
This meant the company was left with a net loss of £900,000 before tax. Discussions were then held with creditors over the companies lack of liquidity, with bosses being told that there was no flexibility to “defer or deal with the highest-pressure creditors”.
The Princess of Wales’ parents were not the only members of the family to claim Government support during the pandemic. James Matthews, married to Kate’s sister Pippa, claimed furlough for Glen Affric, a Scottish shooting estate.
Mike Tindall, who is married to Zara, Princess Anne’s daughter, also claimed furlough through his company during the pandemic. The news comes as critics call for transparency in the administration of the loan schemes that were rolled out during Covid.
Prime Minister Rishi Sunak was the chancellor during the pandemic and set up the Coronavirus Business Interruption Loan Scheme in March 2020, to help businesses affected by the coronavirus and subsequent lockdowns. Businesses looking to claim a loan did not require a personal guarantee for any loans below £250,000.
109,877 loans worth £26.4 billion were made, with taxpayers already forking out more than £4 billion to banks that made loans to cover default and fraud. A judge ruled that the Government would not be forced to disclose those who claimed a loan, despite several concerns about transparency.
Judge Sophie Buckly said that she recognised an “extremely high public interest in transparency and scrutiny” but decided that named recipients could easily become targets of fraudsters.