Queen rattled by ‘awful’ credit crunch

Queen Elizabeth has asked why the credit crunch was not avoided.

Describing Britain’s current financial state as “awful”, the monarch wanted to know why it had taken experts by surprise during a visit to the London School of Economics (LSE), where she opened its £71 million New Academic Building.

Professor Luis Garicano, director of research at the LSE’s management department, said: “The queen asked me, ‘If these things were so large, how come everyone missed them?'”

He told the queen: “At every stage, someone was relying on somebody else and everyone thought they were doing the right thing.”

The monarch, accompanied by her husband the Duke of Edinburgh, was greeted by students, tourists and cheering schoolchildren waving Union Flags during her visit – the first by a monarch since George V laid the foundation stone of LSE’s Old Building in 1920.

The queen’s staff asked earlier this year for a rise in the £7.9 million payment she receives from the taxpayer-funded civil list – which hasn’t increased for almost 20 years and will not be renegotiated until 2010 – as her home costs rise.

Queen Elizabeth, whose personal fortune is estimated to have fallen by £25 million in the credit crunch, faces a shortfall of several million pounds a year which is currently being plugged by her £35million reserves.

The Department of Culture, Media and Sport recently rejected a request for extra funds to repair crumbling royal palaces, estimated to require £32million of essential maintenance.

The queen receives the majority of her funding through the Civil List as well as ‘grants in aid’ for the upkeep of palaces and travel. She also benefits from a portfolio of investments managed by the Duchy of Lancaster.