Politics needs private money…

Alex Kane wonders if the cash for peerages is missing the main point of politics: that political parties require the injection of private confidence and private cash. His own instincts are to keep cash and representation entirely separate. But the scandal attached to the current revelations may end up hurting politics in general rather than the miscreants in particular. By Alex Kane

Is anyone really surprised by the so-called “honours for cash” scandal? Bearing in mind that we have an unelected and unrepresentative House of Lords, packed to the gills with people who have been given the nod by a magic circle, why would anyone be surprised that some of them have actually bought their way into the place?

Since the 14th century hard cash has played a key role in securing seats in the Upper House. When Lloyd George needed funds for the Liberal Party he secured the services of Maundy Gregory, who set up an office in Parliament Square, and between 1916 and 1922, brokered the “sale” of 120 hereditary peerages, 1,500 knighthoods and 25,000 of the newly created OBEs. The going rate for a knighthood was £10,000 (about £250,000 in today’s money), while a peerage went for a minimum of £50,000 (over £1 million).

The 1925 Honours Act, introduced after Lloyd George’s resignation, made it a criminal offence to “sell” honours, but Gregory was still accepting cash until 1933, when he was reported by someone he had tried to interest in a knighthood. Gregory still enjoys the distinction of being the only person to have been convicted and sentenced under the 1925 Act, but, as recent investigations have revealed, it is still possible to enter the Lords on the basis of financial contributions alone.

And it remains possible because membership is still controlled by political parties. Life peers, or “working peers” as they now like to be known, tend to come in through Dissolution Honours (at the end of a Parliament); Resignation Honours (when a Prime Minister resigns); or Political Lists (appointed on a party basis to boost party strengths). The problem, of course, is that the present system doesn’t actually ensure that the best suited are elevated.

The system encourages cronyism. An outgoing Prime Minister will reward former loyalists. The parties elevate their own favourites, including many, best described as celebrity or cash supporters, who have made little or no contribution to frontline politics. And as for the Dissolution Honours, they are tossed out to former MPs and party leaders irrespective of the nature of their political legacy. Why should MPs rejected by the electorate be given a home in the Lords? Why should former Cabinet Ministers, often responsible for failed policies and reforms, be elevated and recast as “elder statesmen”? In other words, why should the political establishment be allowed to nurture and reward itself and its favoured circles?

For all sorts of reasons, not least of which is that I am a democrat, I would prefer the Upper House to be smaller and elected. We certainly don’t need a second chamber which has more members than the Commons, and nor do we need one which is, in the fullest and strictest sense of the terms, unrepresentative and undemocratic. Since Blair, and Thatcher before him, have done so much to undermine the public respect for, and political authority of, the Commons, it is essential that we have an Upper House which isn’t a self-preservation society for dinosaurs, donors, former MPs and mates of the magic circle.

But the fact remains that political parties need hard and constantly flowing cash if they are to remain in business. I have very strong reservations about the tax payer being expected to fully fund the political parties, for I suspect that the parties would simply swallow up the cash and not bother about a broad based membership.

It is quite clear that there are enough people out there who like having the gongs, and baubles, and titles, so let’s have a system where they can buy them on the open market. That strikes me as being a more honest approach than that of continuing with the pretence that the present honours system recognises and rewards the genuinely deserving. It is important that we salute the brave, the extraordinary and the innovative, but what we have now singularly fails to do so; leading to the triumph of mediocrity over meritocracy.

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  • Cataegus

    Agree with much of the sentiment but surely the core of the issue is the need to finance political parties. As in business if in trouble look at both sides of the balance sheet and try to reduce expenditure. Surely it is time to fundamentally reduce the amount political parties and individuals can spend on elections. This would have the added advantage of improving democracy as more could compete more equally.

    Reduce the need for money and you reduce the temptation for if it isn’t peerages it will be some business with an interest. Also simply have an elected upper chamber.

    Easy really, but doubt if it will happen because political parties work at preserving their vested interests.

  • darth rumsfeld

    I would appreciate Alex’s inside track on the following query-

    has Eddie Haughey aka Lord Ballyedmund ever attended a Unionist party branch meeting, a parliamentary party meeting or UUC meeting-either before- or especially after- his ennoblement? If not, what could the reason possibly have been for UUP support for his peerage?

  • Alex Kane

    darth;

    To the best of my knowledge–no.

    As I wrote in a column at the time, I have no idea why the UUP supported his elevation to the Lords. And yes, I am aware of the rumours that he made a financial contribution which kept at least one HQ member of staff employed.

    Mind you, I suspect that you knew all of these answers already!

    Best wishes,

    Alex.