The tactless undertaker (Chapman) suggests they can "burn 'er, bury 'er, or dump 'er in the Thames", but rules out the last option after Cleese confirms that he liked his mother.
As the credits roll and are superimposed on the screen, the national anthem of the United Kingdom begins to play, and the crowd stands at attention.
(As Roger Wilmut pointed out in the book From Fringe To Flying Circus, a genuinely shocked (British) audience would have reacted with an embarrassed silence.)
The sketch was part of a longer running joke within the episode, which was that they expected Queen Elizabeth II to watch the show at some point.
This sketch, the last in both the episode and the second series, immediately followed the "Lifeboat sketch" (also about cannibalism, and which also had the audience jeering in disgust at the end), followed by a letter from a military man concurring with their disgust where the punchline was that it was the Royal Air Force that was suffering from cannibalism, some graphically cannibalistic animation from Terry Gilliam, and an appeal for decency by Terry Jones.