News 21st Aug 2015

Can You Buy a Lordship?

Steve Goodrich

Head of Research and Investigations

Steve is Transparency International UK’s Head of Research and Investigations. He is responsible for managing TI-UK’s research unit and is our specialist on lobbying accountability, party funding and open governance. Before joining TI-UK in May 2015, Steve worked as a Senior Policy Adviser at the Electoral Commission. He has over five years’ experience working on political finance regulation, legislation and data.

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No I’m not talking about buying a faux peerage I mean purchasing a place in the House of Lords.

Technically doing so has been a criminal offence since 1925 under the Honours (Prevention of Abuses) Act a valiant-sounding law that was introduced after the cash for honours scandal of 1922, which involved the then Prime Minister David Lloyd George. Although the Act has remained on the statute book ever since it is reported to have only resulted in one conviction.

The nearest anyone has come to being prosecuted for selling honours in recent years was during the loans for peerages scandal in 2006. Back then when loans to political parties were unregulated and unpublished, it was alleged that wealthy individuals had secretly lent money to political parties in return for membership of the Lords. Although the Crown Prosecution Service concluded it didn’t have enough evidence to charge anyone the whole affair brought to the fore the alleged relationship between money and political appointments.

Since then there has been a continued suspicion about the coincidental relationship between the appointment of peers and wealthy donors. A recent study published by Oxford University claimed that the correlation been the two was “significant” whilst the last public inquiry into party funding found that 81 per cent of survey respondents thought big donors only gave money to parties in return for personal favours. Looking at historical trends it is understandable why this might be the case.

Including today’s newly announced appointments to the House of Lords big donor peers – those who have donated more than £100,000 – collectively donated over £18m before they were ennobled. This figure is likely to underestimate the true scale of the issue, as it only covers individuals who were awarded peerages after 2001, when donations records began. In total, across the last 14 years where data is available, 30 big donor peers have donated a combined worth of over £48m to political parties since 2001.

There could be very valid explanations for these trends. People donate to political parties for a variety of reasons including ideology, pragmatism and whim; any of these could account for these fluctuations in contributions. However, the evidence suggests this is not what the public think.

According to Transparency International’s recent global barometer, two-thirds of UK respondents thought that political parties were corrupt. That’s a pretty damning statistic by anyone’s standards. If politicians want to restore confidence in the democratic process they need to take big money out of politics by introducing a £10,000 limit on the amount anyone can donate in one year to a political party. This isn’t a new or controversial idea – the Conservatives, Labour and Liberal democrats have all pledged to reform party funding for years – however they’ve had an uncanny tendency to kick the issue into the long grass. But as long as there are Lords and not limits on political donations, this issue won’t go away and neither will public distrust in our political system.

Notes on figures

This analysis used data from the Electoral Commission’s register of donations as of 21 August 2015. We have not included any loans given to political parties in this analysis. The registers of donations do not have to show whether or not a donor is or has become a peer and political parties do not have to report this information. However, donors have been matched to peers where it appears reasonably likely that they are the same individual.

The Electoral Commission donation data does not include key information that could help to provide greater certainty about the identity of the individual. Unlike in the United States, political parties do not have to report the occupation or employer of donors. Parties have to report to the Commission the address of individual donors however this information is prohibited by law from being published.

We have not included any companies that have or may have been controlled by peers, which means the figures quoted above are likely to be lower than the actual amounts given by peers. We have excluded peers who joined the Lords before 2001 in some of our analysis because there were no public records of donations to political parties before then.