Jane Merrick: Mutualise the Royal Family? Why not?

The week's second most interesting story about a boat has caused a bit of queasiness on the republican left. When it looked as if the taxpayer was going to have to foot the bill for a new royal yacht, in time for the Queen's Diamond Jubilee, it was easy to get worked up about it – why should we lavish such a huge expense on the monarchy when the economic climate is so grim?

But when it emerged that the £80m price tag could be met by the private sector, including a £5m donation from Lord Ashcroft – who knows a bit about spending money offshore – the royal flagship became a more difficult target. How do you oppose something which we taxpayers aren't paying for, and will bring a smile to the face of an 85-year-old great-grandmother?

Next came the announcement that there would be a river pageant, including a flotilla of 1,000 boats sailing down the Thames for the jubilee celebrations in June, at a cost of £10m – yet all funded by sponsorship (though the cost of security will come from the taxpayer). Jibs flapping all round. How do we negotiate such constitutional choppiness?

Yes, we appreciate the Queen for her 60 years on the throne, and we want her to enjoy her weekend in June. We'll probably join in in some way, perhaps even go to the Thames to watch the spectacle. Even if we don't want to take part, we must acknowledge that the weekend will boost tourism, and therefore the economy (although maybe the people painting the Queen's personal Gloriana barge in 17th century gold could use a cheaper, less ostentatious commodity instead).

All of this leaves us in difficult and, dare I say, ideologically uncharted waters. Can you celebrate the privately funded yacht and jubilee if you resent paying for the Royal Family for the rest of the time?

I have a modest proposal that I hope will help. Why don't we turn the monarchy, and the Queen herself, into a PFI – a private finance initiative? Funding for the royal yacht is a good model for this – something owned and run by the state, but funded by the private sector. There is an inherent difficulty I recognise which is, of course, that the Queen is the state, but am sure we could get round that. You could raise some of the money through sponsorship: for the yacht, as an example, HMS Burberry perhaps? Jack Wills jerseys for the cabin stewards?

Better still, why not take a tip from Nick Clegg, who on Monday called for more John Lewis-style companies that are owned by their staff, and mutualise Her Majesty? Turn the Royal Family into the Queen's Co-op. The Duchess of Cambridge could literally be the People's Princess.

There would be a bit of private funding to help to meet the annual costs of the Royal Family – which are about £40m (although that figure does not take into account the £50m cost of last year's royal wedding, and the anti-monarchy group Republic says the real annual figure is actually £100m). But members of the public could opt to buy shares in the mutual monarchy, which would be the main source of funding. Anyone who didn't want to buy shares wouldn't have to. The public cost of the monarchy could be spent elsewhere. That £40m is not going to do much to dent the deficit, but it will help a bit, and pay for a few nurses' salaries or some new school classrooms.

And if, as I may have run out of sailing metaphors, I could switch to hunting to conclude: a mutualised monarchy would shoot the left's fox, because it would take the cost out of the republican argument; and it would shoot the right's fox, because they want a smaller state. In the middle, the Queen never knowingly undersold. Isn't that something to celebrate?