Duke Westminster's £9bn inheritance defines the age of austerity

OPINION: When I first stumbled off a plane into the London Underground six years ago, all I knew about the British aristocracy was that the Queen was paid several million pounds a year to occasionally wear the world's heaviest hat, and that she had a few kids who were packed off around the world every couple of years to embarrass themselves by attempting the traditional dance of whichever former colony they were visiting. If only that were the whole of it.

But while the pointless pomp of royal occasions still dominates our news media, our cultural offerings like Downton Abbey and Upstairs Downstairs depict the early twentieth century as the beginning of the end for England's aristocracy. We're led to believe that all that remains today for most noble families is a title on a piece of paper, a crumbling old mansion somewhere and perhaps a few acres of fields for fox-hunting.

Yet gushing gossip columnists last week offered a brief glimpse into the real lives of Britain's nobility - and not only do they still enjoy unimaginable wealth, they depend on big-business-style tax avoidance and property speculation to keep it topped up at the public's expense.

The toff tossed into the limelight this week was one Hugh Grosvenor, a thoroughly undistinguished 25-year old accounts manager from Chester who was suddenly trumpeted in the Telegraph as "Britain's most eligible bachelor" when his father died last Tuesday, leaving Master Hugh the title of Duke of Westminster and a fortune of nearly £9bn.

It's old money, but takes the form of a modern business empire. It turns out his sprawling real estate portfolio ducks a 40 percent inheritance tax by virtue of being registered as a family trust, which assumes the legal fiction that the family's handpicked trustees could choose at any time to hand over the cash to some other relative who isn't the new Duke of Westminster.

Meanwhile the primary source of his wealth, the Grosvenor Group that owns everything from offices in Silicon Valley to London's US embassy, paid an effective tax rate of 11 per cent last year despite raking in £527m - 2.6 billion cedi. Regrettably the people paid a minimum wage to scrub the toilets in His Grace's holdings don't have the cash on hand to hire such clever accountants, and so they pay a basic tax rate of 20 per cent.

Nor is it just the grubbing Grosvenors: it's estimated that around a third of all land in Britain is still owned by noble families, some 92 of whom also inherit the right to directly vote on all parliamentary legislation in the House of Lords. It comes as no surprise then that successive governments have failed to resolve address a housing crisis that has been in the headlines for roughly twenty years. With so much land in the hands of so few, market demand has driven rents and house prices far beyond what any normal person can expect to earn. The knock-on effects of homelessness, overcrowding, illegal tenancies in unsafe buildings, hand-to-mouth poverty and public health epidemics can all be traced back to this kind of Dickensian inequality. But in the words of the late, great author Terry Pratchett, "while it was regarded as pretty good evidence of criminality to be living in a slum, for some reason owning a whole street of them merely got you invited to the very best social occasions.”

These days, the castles built by England's lords and ladies stand empty but for tourists. But don't be deceived - the toffs have simply traded them for penthouse apartments instead.