LEADING ARTICLE: On your bike, Duchess

Yesterday the chief executive of Britain's most prestigious outfit got tough. She let it be known that the company was not prepared to bail out one of its most wayward loss-making subsidiaries. The word was that it was time for this particular offshoot to stand on its own two feet and to take responsibility for itself.

In taking this line Her Majesty the Queen was exerting the leadership that the beleaguered monarchy requires from her. Delayering and downsizing is finally coming to the Royal Family, having swept through most other British corporations of note.

It started in 1993 when the Queen finally accepted the political importance of paying tax and did some long overdue thinning out of the civil list to remove extraneous hangers-on. Late last year she finally bit the bullet and stepped into her son's disastrous marriage by trying to procure a long-overdue divorce between the Prince and Princess of Wales. Now she has let the Duchess of York know that she is on her own with her debts.

Quite right, but rather late. It will seem incredible to most people that a woman in her mid-thirties can squander a huge separation settlement, substantial book royalties and a generous allowance for her children, and then go more than a million quid into the red.

It is some kind of testimony to the company that the Duchess of York keeps that she could be financially stretched and yet jet off for the kind of holidays and shopping trips that 99 per cent of her mother-in- law's subjects can barely imagine. There is a lack of realism and responsibility there that boggles the mind.

But Her Majesty must also ask herself how all this has come about. How did Sarah Ferguson come to expect the lifestyle of an international jetsetter, feeling little obligation to restrain her most extravagant impulses, while rendering precious little public service?

Presumably she did it because that is still the way that a substantial part of Britain's Royal Family and its entourage lives. With their huge his-and-hers country estates, several holidays a year in Klosters or Mustique, state-of-the-art Range Rovers, education at Eton, polo-playing (is there nowhere a prince who likes soccer?) and helicopter-flying, the royals have not been part of Britain but apart from it, yet without gaining any gravitas or authority.

The time has come - and almost everybody sees it - for a more democratic monarchy. To survive, the monarchy must reflect back to us the virtues that we most respect - not the lifestyle that we most envy. Otherwise, the company may one day go bust, something the chief executive seems to have realised.