Fading foothold

Queen Elizabeth II, UK's longest-reigning monarch, died "peacefully" on September 8 at the age of 96 at Balmoral Castle, Scotland. She is succeeded by her eldest son, who was proclaimed King Charles III hours after her death. Two days before her death, the Queen had appointed Liz Truss as Britain's new prime minister, replacing Boris Johnson. These developments have come at a time of unique flux for Britain — a country saddled with its worst economic outlook in years, a deepening energy crisis and increased inequality. It piles pressure not only on Truss but also on King Charles, Britain's two new leaders, whose role will be to rally public sentiment during a period of crisis. The monarchy also faces criticism for being outdated and absorbing public finances.

Hours before the queen's death, Truss outlined her plans to combat the UK's cost-of-living crisis — unveiling a broad stimulus package designed to help Brits with energy bills, which have soared following Russia's war in Ukraine. It comes after a petition to boycott energy bills began gaining traction in the UK. The package, which is set to cost over £100 billion, is expected to lower peak inflation by 4-5 percentage points. But economists have warned that the move could complicate the Bank of England's already mammoth task of curbing record-high prices, by spurring spending on goods and wages. Last month, the UK's central bank delivered its biggest rate hike in 27 years, raising the benchmark to 1.75 per cent, in a bid to bring down inflation, which is currently the highest among G-7 nations at 10.1 per cent, reports CNBC.

It is also reported that the economy of the UK has recovered more slowly than expected from a slump triggered by an extra public holiday in June to mark Queen Elizabeth II's jubilee, with industrial production and construction both shrinking. Analysts fear that the death of the queen and another holiday for her funeral on September 19 may be enough to tip the economy into recession in the current quarter. Meanwhile, one week before Queen's death, Bloomberg reported that India, Britain's largest colony during 19th century, has surpassed the United Kingdom to become the fifth largest economy in the world. According to the report, the size of the Indian economy in 'nominal' cash terms in the quarter through March was USD 854.7 billion while that of the UK was USD 816 billion. This was on an adjusted basis and used the dollar exchange rate on the last day of the relevant quarter, reports Business Today.

The second Elizabethan era ended with the UK economy in turmoil. Though the pound traded higher on September 9 at USD 1.16, recovering from a 37-year-low hit earlier in the week, a long-term decline in its value is projected as the global financial crisis is likely to continue. Analysts fear that there's a strong chance that King Charles III will be the first British monarch to pay more than a pound for a dollar, or more than a pound for a euro, or both.

As for UK banknotes, which feature the portrait of the Queen, they "continue to be legal tender," the Bank of England said, adding it would announce plans to print new cash with a portrait of King Charles after the period of mourning ends, reports CNN.

Economic impact

King Charles III has inherited a rocky economy and needs to immediately provide the same kind of reassuring presence that his mother did during her 70-year reign. In his first address to the British public, Charles laid out his intentions and view of the role he assumed upon the death of his mother Queen Elizabeth II, stressing that "the role and the duties of monarchy" must remain.

The Queen graces 4.5-billion-pound banknotes in circulation. Replacing the image on the paper notes can take at least two years and will have to be approved by Buckingham Palace, reported The Guardian. Before Queen Elizabeth II's reign, monarchs did not feature on the notes. This changed in 1960 when the queen's image started being printed on £1 notes. Queen Elizabeth's face also appears on some banknotes in Canada, on coins in New Zealand, and in some other parts of the Commonwealth. With her son King Charles III now at Britain's helm, decades of symbols in 'Her Majesty's honour' — the national anthem, postal stamp, flag, currency — will change. However, after the Queen's record-breaking reign, unpicking her name, image and iconography from the fabric of national life in the UK and across the Commonwealth will take much longer.

Notably, this exercise of replacing the image of Queen Elizabeth II with that of King Charles III on currency, stamps, and cyphers will cost a considerable sum to the UK. In addition to this, all UK passports will require a change following the Queen's death, thus, adding more to the cost. In addition to these, many uniforms in the UK, including those worn by police officers and the military, will be changed as the cypher of the Queen will be replaced by that of the King. Police and military gears will also require a change as some of the gears have the Queen's initials and regnal number, footing a huge bill.

A 2017 study by the Brand Finance consultancy estimated that the Royal Family adds USD 1.7 billion to gross domestic product each year, yet costing each member of the British public £4.50 annually, as per a report by Bloomberg. The British monarchy, as a brand, was valued at around USD 88 billion in 2017 by Brand Finance. The Queen's personal wealth from investments, art, jewels and real estate was estimated by Forbes to be worth around USD 500 million. The Sunday Times Rich List calculated the late Queen's wealth at 340 million pounds in 2015.

King Charles III — who formally acceded to the British throne and did not have to pay a penny as inheritance tax when he inherited his mother's wealth — is one of the most lucrative money-makers in the British Royal Family business. The 1,30,000-acre Duchy of Cornwall, which he owned as a prince, generated millions of dollars a year in rental income. He owned the landmark cricket ground The Oval, farmland, seaside vacation rentals, office space in London, and a suburban supermarket depot. Over the past decade, the team of professional managers assembled by Charles has increased the value of his portfolio and profits by about 50 per cent, the New York Times reported. It also valued the Charles conglomerate's holdings at about USD 1.4 billion. On the other hand, Queen Elizabeth's portfolio was worth around USD 949 million. While the two estates represent a small fraction of the royal family's fortune, estimated to be around USD 28 billion, the family also has personal wealth that remains a closely guarded secret, reports Money Control.

One major source of earnings for the British Monarch is the agricultural subsidies they earn by virtue of the farmland they own. UK farmers used to receive subsidies from the European Union via the Common Agricultural Policy (CAP), but that financial support was replaced by funding from Westminster after the UK left the EU on 31 January 2020.

Sandringham Estate, the British monarch's country retreat in Norfolk, lost close to 7,00,000 pounds a year when EU farming subsidies ended while the farms near Windsor Castle lost 300,000 pounds of agricultural subsidy, the Sunday Telegraph reported. The estates of Prince Charles, the heir to the throne, faced funding cut from Brexit of 100,000 pounds a year while the Crown Estate — which managed Royal land — also got hit, taking the total to an estimated million pounds, reported Economic Times. However, since 2020, the UK government directly subsidises the farmers to support the local agricultural industry and to help protect food supplies.

Accounts of the Sovereign Grant — which funds the Queen and her household's official expenses — show that the monarchy cost the taxpayer £102.4 million during 2021-22, an increase of 17 per cent from the previous financial year. Taxpayers pay the majority of the Royal Family's spending through the Sovereign Grant, which was fixed at £86.3 million this year. According to a Bloomberg report, as profits have fallen at the Crown Estate, the Sovereign Grant for the next two years will be fixed at this year's £86.3 million, totalling £172.6 million over the next two years. Huge expenses by the British exchequer for maintaining the royal lifestyle of the Monarchy are bleeding the ailing economy which needs huge funds for social welfare schemes to combat recession.

Soft power

The passing of the Queen will have more impact on the UK than just losing a head of state and a Queen. The Queen was not only the longest ruling monarch in Britain's history, but also ruled the UK from when Britain was an imperial power — having been crowned Queen in June 1953, when Britain still controlled the Suez Canal and held protectorates and colonies in Africa, the Middle East and Asia.

A dent in Britain's soft power abroad is one potential casualty of the Queen's death. Despite facing an apparent decline in global power, including a downsizing military and a shrinking economy, one aspect that has helped Britain maintain global influence is its soft power. This has been ensured through institutions like the BBC and British Council, and universities attracting top academic talents, globally. Various cultural impacts, including musicians and series, have played a role too. Of course, the English language being a global language has also played a vital role in Britain's soft power. Throughout the last 70 years, the Queen has arguably acted as the most important diplomatic representative for London, having charmed various heads of state through state and diplomatic visits during her reign. The Queen was required to be apolitical, and this neutral approach proved to be beneficial for Britain's foreign relations.

Though for generations, Britain was renowned as a haven of political stability, the churning unrest at the top of government attests to the fact that British politics has turned tumultuous in recent years — a third of the 15 prime ministers the queen has welcomed came just in the last 15 years of her seven-decades-long reign.

Colonial legacy remains

The Commonwealth of Nations, or simply the Commonwealth, is a group of 56 member countries, the vast majority of which are former British colonies. They are mostly in Africa, Asia, the Americas, and the Pacific. Three European nations are part of the Commonwealth: Cyprus, Malta and, of course, the UK itself. The Commonwealth is an intergovernmental organisation of 56 independent member states, 52 of which were formerly part of the British Empire. The British Queen/King heads the Commonwealth. By virtue of her/his position in the Commonwealth, the British monarchy exercises its soft power on the member states. The Commonwealth is home to 2.5 billion people — a third of the world's population, the bulk of which lives in the Indian subcontinent.

At her accession in 1953, Elizabeth was the monarch and head of state of seven independent states: the United Kingdom, Canada, Australia, New Zealand, South Africa, Pakistan, and Ceylon (now Sri Lanka). Since then, new realms have been created through the independence of former colonies and dependencies. These smaller Commonwealth realms consist of 14 countries at present, namely, Australia, the Bahamas, Belize, Canada, Grenada, Jamaica, New Zealand, Papua New Guinea, Saint Kitts and Nevis, Saint Lucia, Saint Vincent and the Grenadines, the Solomon Islands, Tuvalu, and the United Kingdom. These nations represent the last vestiges of Britain's colonial empire, a thread that binds the British monarch to about 150 million people outside of the UK. Most living residents of the Commonwealth realms have never experienced a direct relationship with Britain.

Of the remaining 41 member states of the Commonwealth, 36 are republics — this group includes India, Pakistan, Bangladesh, and Sri Lanka. The other five — Brunei Darussalam, Lesotho, Malaysia, Eswatini (formerly Swaziland) and Tonga — have their own monarchs.

King Charles's ascension to the throne has reignited a debate over whether the royal family deserves a global role in the 21st century, no more so than in the 14 Commonwealth realms where the British monarch remains the head of state. A legacy of empire and slavery that was entwined with British royalty for centuries has raised tough questions about the place of a foreign king, and republican movements from the Pacific to North America to the Caribbean will be assessing whether they should seize the moment.

While there are strong republican voices in Australia, New Zealand and Canada, Jamaica appears to be most likely to face the issue immediately, not least because appointing the new king might require a constitutional referendum. In Australia, Canada and New Zealand, the transition has brought grief but also raised resentment around the damaging effects of Britain's colonisation on Indigenous peoples.

The death of the Queen heaps greater uncertainty onto an already uncertain world. And for the Commonwealth countries, now that the last link to the empire is gone, it is truly the end of an era. In this new millennium, will Charles III be a welcome head of state, questions The Guardian.

Conclusion

The Queen's life spanned the entire history of modern Britain. She was born when Britain ruled a global empire of some 600 million people. She died when Britain was a medium-sized northern European country with an uncertain future. Her seventy-year reign — spanning the aftermath of WWII, the winding down of Britain's vast empire, the 2016 Brexit vote and a global pandemic — had come to 'symbolize a rare constant in a world of constant change. With her demise, the future of the British monarchy and its relation with the previous British colonies — the Commonwealth of Nations — has become uncertain.

The new era, beginning post-Queen's death, will witness a lot of changes that would directly change the way and mode of Britons' lives. The economic downturn that Britain is facing will also affect its associated countries such as Australia, New Zealand, and Canada. The colonial past of these countries will have an impact on their political economy.

Coincidentally, when preparations for a grand farewell to the departed Queen are in progress, and leaders from former British colonies and UK's trusted allies are arriving in London to pay her the last tribute, the Shanghai Cooperation Organization (SCO) Summit 2022 of the leaders of few emerging economies — many of them are not very close to the UK — was held during 15-16 September at Samarkand, Uzbekistan. The SCO, which is currently one of the largest regional blocs in the world, has eight full-time members — India, Kazakhstan, China, Kyrgyzstan, Russia, Tajikistan, Pakistan and Uzbekistan. Iran is expected to become the latest member of the bloc this year. This new alignment may challenge the colonial authority and the soft power that Britain enjoyed through the Commonwealth.

Unless corrective measures — both political and economic — are taken at the earliest, the United Kingdom (UK), already isolated from the European Union, is likely to get further marginalised in the evolving new world order led by the emerging economies of Asia and Eurasia, particularly China, India and Russia.

Views expressed are personal