Is Britain becoming a republic by default?

Lunch had barely finished on Tuesday while the World Cup semi-final was unfolding on the telly.

With a heatwave blazing outside, one might have expected the afternoon session of the General Assembly of the United Nations to attract little more than a handful of delegates snoozing off their lunch, headphones unplugged.

Not a bit of it. The place was buzzing. Every space in the public upper galleries was full. In the dated auditorium, scene of so many Cold War showdowns, even the grandest seen-itallbefore diplomats were fumbling with their cameras like excited schoolchildren.

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And at 3pm, all rose to their feet as the UN Secretary-General, Ban Ki-moon, escorted in a very special guest. The Queen had come to address the world.

This talking shop of 192 nations is pretty blase about visiting leaders, of course. But everyone knew that this was a particularly special occasion.

'In a changing and churning world,' declared Mr Ban by way of welcome, 'you are an anchor for our age.'

After 58 years in charge, the Queen is not quite the world's longest-serving head of state.

She is still behind King Bhumibol of Thailand (64 years) and the Emir of Ras al-Khaimah (62 years).

And yet, at 84, she has seen more, met more and travelled further than any world leader.

With her 89-year-old consort at her side, she shows no signs of flagging.

Many of her audience - and, indeed, many of the member states of the UN - did not exist the last time she was in this chamber in 1957.

But it was not just her longevity which had packed them in. It was what she represents.

The Queen had come to the UN, on the way home from her nine-day tour of Canada, as head of state of 16 countries and head of the 54-nation Commonwealth.

To those in the business of global diplomacy, her enduring appeal and influence over a large part of the Earth's surface is, simply, astonishing.

Her eight-minute message - which might be summarised as: 'Keep up the good work' - earned her a standing ovation.

The New York media, in turn, was more impressed by her subsequent visit to a sweltering Ground Zero and her almost inhuman lack of perspiration.

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After a dismal summer of national sporting failure, with Britain's name being dragged through the oil-stained mud of the Gulf of Mexico and one economic horror story after another, here, surely, was something for this country to be proud of.

We may be pretty hopeless at many things right now but we still have a leader who really does command the world stage.

Sadly, back at home, I fear that we simply do not seem to share the rest of the planet's enthusiasm.

The Monarchy, our most esteemed national institution, is being undermined on several fronts.

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And before we know it, we will have caused untold harm to something of inestimable value.

This week, two issues of royal importance have been high on the public agenda.

One - the publication of the annual royal financial report - virtually eclipsed the Queen's tour of Canada.

The other, however, did not mention her at all.

On Monday, the Deputy Prime Minister came to the Commons to announce that future election dates would be fixed.

'This is a hugely significant constitutional innovation,' he declared. You bet it is.

He also announced new rules governing the way in which MPs and Governments can and cannot dissolve Parliament.

The details are not important here. What was astonishing was the breezy omission of the central figure in this process. Only one person can dissolve Parliament - and it's not Mr Clegg. But not once did he, or anyone else, mention the Queen.

Now, I am not suggesting any sort of snub. No offence, it seems, was either intended or taken.

But it speaks volumes that in all their deliberations on an issue of fundamental importance to our democracy, it simply did not occur to Mr Clegg or the rest of the political class to make any reference to the Monarchy - the one institution that protects us constitutionally from the overwheening ambition of politicians.

And that does not bode well for the big battle that lies ahead.

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We heard some early gunfire in sections of the media this week. If Ministers have forgotten why we have a Monarchy in the first place, they are hardly going to be sympathetic to arguments that it needs more money.

Yet the fact remains that the royal finances are heading for a crisis. And it could not come at a worse time.

The present system of royal funding is a baffling jumble of grants and cross-payments, but it broadly breaks down into three parts: money for property maintenance, money for transport and the Civil List.

Last year the whole lot came to £38.2 million.

It is the Civil List which covers the Queen's costs as Head of State - mainly wages and entertaining - and, historically, it is given to the Monarchy in exchange for the profits of the Crown Estate.

This is not a bad deal. Last year, the Crown Estate handed a bumper surplus of £226.5 million to the Treasury.

The Civil List, on the other hand, has been stuck on £7.9 million per year for the past 20 years.

That sum was first devised in 1990, when Mrs Thatcher was Prime Minister, and was fixed for ten years.

Thanks to rigorous savings by the Keeper of the Privy Purse (the royal accountant), the Palace built up a surplus.

When the Civil List came up for review in 2000, Tony Blair decided to keep it at £7.9 million for another ten years.

Despite the ravages of inflation, he argued that any shortfall could be met from the surplus acquired in the previous decade.

No other branch of the state has existed on the same flat rate for two decades. If MPs' wages were pegged to the Civil List, an MP would still be on £26,000 - the 1990 wage - instead of £66,000 a year.

By public sector standards, it is a miracle that the Monarchy survives financially. But this system cannot continue.

Even the most cost-efficient organisation cannot keep on delivering the same returns on a frozen budget.

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All those careful savings from the Nineties have nearly gone. This year, while the Government gave the Queen the usual £7.9 million, her actual costs as head of state were nearly double: £14.2 million.

The Queen paid the difference from what remains of that reserve fund. By 2012 - her Diamond Jubilee year - the whole lot will have gone.

And so, with the Civil List up for its ten-year review this summer, the Palace should, by rights, have been expecting an increase.

Except, of course, that it would have been utter madness for all concerned. How could the Chancellor, George Osborne, stand up and announce a rise for the Royal Household while slashing budgets all over Whitehall?

Besides, the new Government has rather weightier concerns. So, Mr Osborne explained that he would stick with the £7.9 million Civil List figure for another year or two while he pondered new methods of royal funding.

The likely solution will be for the Treasury to give the Palace a single pot of money to include the Civil List, transport, property, equerries, medals, the Holyroodhouse garden and every one of various fiddly items currently scattered across various Government budgets.

It is badly needed. The present funding system tends either to confuse or irritate. A new strong political support.

The Monarchy is an easy target. How absurd, some said this week, for the chatelaine of the Royal Train to plead poverty.

But the truth is that the Royal Household is being punished for being frugal - and out of step with the rest of the state.

For the past 13 years, the public sector has been gorging on public money - ballooning to £620 billion a year - and must now slim down.

For the last 20 years, the Monarchy has been slimming down dramatically - from £87.3 million in 1992 to £38.2 million in 2010.

It cannot trim anymore unless we want a different sort of Monarchy.

The usual charges - too many 'minor royals'; too many ' needless' flights - overlook the fact that the Queen uses her own money to repay the office costs of all family members except Prince Philip and the Prince of Wales (who is self-funded).

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I dare say that if the Girl Guides of Clackmannanshire or the old soldiers of Gwent would only stop inviting members of the Royal Family to visit them and salute their activities, then the travel costs would plummet.

As it is, the royal travel bill nearly halved to £3.9 million last year.

Interestingly, the biggest travel item was the £373,470 it cost to fly the Queen and her entourage to the Commonwealth summit in Trinidad.

The then Prime Minister, Gordon Brown, chartered a similar jet to fly to the same summit separately. Downing Street is unable to tell me what Mr Brown's jet cost us.

Royal bills have to be more transparent. The Queen, incidentally, is the only G8 head of state without her own plane even though, since 9/11, security considerations have ruled out scheduled flights.

But the travel issue is a red herring. The biggest chunk of the overall cost is always property maintenance - more than £15 million last year.

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And just as the French (who, of course, have no monarch) still spend millions on Versailles, so those Palace repair bills will always be with us whoever is head of state.

Royal extravagance? Buckingham Palace has not been rewired since George VI was on the throne and bits are falling off.

There is already a backlog of repairs and, if nothing is done about it, those arrears will have become a £32 million headache by 2018.

Sadly, none of this is likely to cut much ice with a political class that, too often, regards the Monarchy as merely ornamental.

This week, we heard the ritual demands for the Windsors to be cut back to the level of a European presidency or one of the so-called ' bicycling monarchies ' of Scandinavia.

Do these critics realise that the Italian head of state, a certain President Giorgio Napolitano (no, I hadn't heard of him either) costs his people a whopping £202 million a year?

What about the 'bicycling' King of Norway? (When I interviewed him a few years ago, King Harald, a jovial fellow, asked me why the British media always referred to him as a cyclist when he hadn't sat on a bike for 20 years.) He comesin at £18 million a year, or £3.83 per subject

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At 62p per person in Britain, I'd have said the Queen was better value - especially as she is reigning over 15 other countries at the same time.

So, how do we explain the attitude of today's political elite towards the Monarchy?

sense no animosity towards the Queen in the coalition ranks. David Cameron, after all, is distantly related to her and, come the 2012 Diamond Jubilee, MPs on all sides will be keen to bask in her reflected glory.

The Monarchy, it seems, is not at risk of attack - but of neglect.

Few of today's politicians, I fear, are conscious-of why Britain has enjoyed such historic stability and continuity while other nations - friends and foes alike - have endured upheaval and revolution.

Otherwise, more people might have seen fit to observe a date which has just passed almost unnoticed - the 350th birthday of the modern Monarchy itself.

It was in the summer of 1660 that England celebrated the Restoration - the return of Charles II and the start of our constitutional Monarchy.

It's not for the Throne to celebrate itself, of course. So, the Queen has marked this milestone modestly by attending the 350th birthday convocation of Charles II's great scientific creation, the Royal Society. She has also authorised a £5 'Restoration' coin for collectors.

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But while both the previous and present Governments have been busy marking important events like the 70th anniversary of General de Gaulle's speech to occupied France, the 20th anniversary of the fall of the Berlin Wall or International Biodiversity Year, we have yet to hear a Minister or a Government department suggest a pat on the back for the Crown, let alone a party. Perhaps it's just not a big enough deal.

There won't be any grumbling from the Palace. Having reigned since Winston Churchill was in Downing Street and the nation was still on rations, the Queen is a paragon of stoicism.

But other nations often find it strange when the most famous woman in the world turns up in a chartered plane while, back home, the most famous residence in the world is in a dangerous state.

I wonder what those countries will think a few years hence if the Queen simply stops visiting because she can't afford the journey.

Unless, that is, a Minister is good enough to let her hitch a lift on his plane.

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