House of Commons - Public Administration

Select Committee on Public Administration Fourth Report

6 Are Political Honours Appropriate?

22. For Arthur Henderson, a Labour member of the 1922 Royal Commission which first examined this matter, it was clear that it was not proper to reward political service through a patronage system of honours. He observed that, "It cannot be doubted that honours have been conferred upon persons whose chief claim to recognition was Party service, and … that the financial exigencies of political parties were in themselves almost a sufficient reason for the conferment of political honours".[11] In his view the abolition of political honours would not in any way diminish either the volume or the quantity of the services given to the community by its citizens.[12]

23. There continue to be different views on the appropriateness of honours being awarded for political service. Active participation in the democratic process is not dishonourable. Indeed it is a key plank of our own foreign policy to foster democracy, party systems and good governance in many countries around the world. It cannot be considered less desirable at home. The challenge is to recognise the value of political participation for civic life, especially by local volunteers, while avoiding the use of the honours system as an instrument of political patronage. However, the risk remains that honours will be mobilised for patronage and the perception is that they have been. In particular there is a belief that large financial supporters of a party or a government programme are rewarded with an honour or peerage for their generosity rather than their worthiness.

24. The evidence is that there has always been a close correlation between party funders and the distribution of honours. In some respects, of course, this may be inevitable since large donors are often wealthy and successful individuals who might be recognised by the honours system for other reasons. It is this which has led to the principle, accepted by the PHSC and subsequently by the Appointments Commission as well as the Committee on Standards in Public Life, that a donation to a political party should not be a bar to being honoured. It should be neither an advantage nor a disadvantage.

Political accountability

25. However, translating this principle into practice is not an easy task. In our view certain improvements to current practices are possible and desirable. First, appointment to the House of Lords, as we suggested in our Honours report, should no longer be considered a part of the honours system.[13] Sir Gus O'Donnell seemed clear in his own mind about the distinction when he told us that, "As far as I am concerned, I have them [honours and peerages] in two separate areas".[14] He went on to explain that what is important about peerages is that it is people who can make a contribution that go to the House of Lords. That is why peerages are different from honours, which recognise contributions to society.[15] However, this confusion is present even now in the Appointments Commission itself. Lord Stevenson told us that:

the broad test we work to is to convince ourselves that a given nominee …. will enhance the House of Lords … and the workings of the honours system.[16]

26. It is right to give recognition through the honours system to political activity as to other walks of life but that should not include enhanced probability of access to the legislature for party donors. As Lord Hurd, a member of the Appointments Commission, observed "There are lots of acts of virtue which do not necessarily lead to the House of Lords".[17]

27. Asked specifically about peerages for sponsors of city academies, Sir Gus O'Donnell thought "… it was perfectly reasonable for a [party leader] to decide they want someone … who is an expert and knows a lot about education…".[18] Sir Alistair Graham had reservations. For him the working peers are a "fact of life" appointed by a "conscious and transparent arrangement". However:

It is slightly different when you get one particular government programme, in this case education, where a small group of people - because they are a relatively small group of people - have the money to make a contribution to an academy and therefore make a position in the House of Lords as a result of that.

He believed that to be corrupt. His remedy was to urge reform of the House of Lords.[19]

28. We agree with Sir Alistair on the need to complete the changes already made to the House of Lords. We welcome the fact that the Prime Minister announced on 23 March that second stage reform will once again be taken up, although it is likely that reaching agreement and securing legislation will take some time.

29. There will therefore be further lists of working peers prior to then. It has long been the case that parties reflect their political priorities through their choice of membership of the parliamentary party in the Upper House. The key question is who those individuals should be and how they are selected. Working peers essentially form the respective parliamentary parties in the Second Chamber. All the parties (and not just their leaders) might therefore be expected to have a greater role in the selection and approval of candidates for nomination as party peers, pending completion of the second stage of Lords reform, though this is clearly a matter for the parties. The corollary of such a change, of course, would be that, although the Prime Minister would remain constitutionally responsible for putting the final list forward to the Queen, this would be done without amendment to nominations put forward by the political parties.

30. Making it explicit that nominations to the peerage entail appointment to the legislature rather than the award of an honour would make those nominated to be working peers more like those appointed to be ministers in the Upper House. This would make the credibility of members of a parliamentary party in the Second Chamber the direct responsibility of the parties concerned. It would be consistent with the case put to us that it has always been the convention that parties place supporters of their policies in the Upper House. As a consequence, it should also make the manner in which such nominees are chosen by the party leadership a matter of active interest and responsibility for the party itself. Such a shift would, of course, have to be modulated to reflect the eventual character of a reformed House of Lords, possibly elected in whole or in part.

Enhanced scrutiny

31. In our original report on the honours system, we recommended the abolition of the PHSC on condition that an independent honours commission would, among other things, take on its responsibility for propriety issues.[20] This did not happen. The PHSC was abolished but its responsibility for vetting honours was divided up between the Appointments Commission and the honours committees. This was a retrograde step which diffused consistent application of standards of propriety across separate bodies.

PEERAGES

32. In its written evidence to us the Appointments Commission noted that in April 2005 the Commission took on the remaining task of the PHSC, the vetting of a small number of individuals on the honours list, but that the Prime Minister had not asked it to take on the scrutiny of political donations made by candidates for higher honours.[21] This was because of the belief that, with the Electoral Commission's register of donations covering the years since 2001, there was no longer any need for this degree of formal scrutiny.[22] The honours committees do, however, take account of the register of donations kept by the Electoral Commission in examining citations for honours. This decision to rely mainly on this register has proved flawed. Events in recent months have shown that it is unequal to the task of providing full reassurance about both nominations to the peerage or the award of honours and declared financial connections with a party. It is also unfortunate that the form sent to those whose name had been put forward specified the information required in a way which did not make it sufficiently clear that all (financial and other) connections to a party were relevant, whether or not they fell within the remit of the Electoral Commission.

33. Lord Stevenson admitted to us that, "There was ambiguity as to what a donation was", leaving the way open for undeclarable loans to be omitted from the certification process for nominations of working peers.[23] Nonetheless he believed that the Appointments Commission should have been told about the undeclared loans made by some of the party nominees for a peerage. He went on to announce that:

our requirements… will be redrafted with a very strong banner saying we would expect to be told about everything and anything that could possibly be thought to affect a peerage.[24]

34. We recognise that legislation currently going through Parliament will require all loans to be declared. However, as recent events have shown, decisions about the probity of an individual cannot rely safely on the way in which parties have chosen to interpret their legal obligations to declare their funding streams. Thus, safeguards about propriety in both the appointments process to the House of Lords and awards under the honours system would be more robust if financial or other connections of any description could be thoroughly scrutinised. We therefore welcome the Appointments Commission's announcement that it intends to make abundantly clear on their forms and other material their absolute requirement to be informed about any financial or other matter which might affect consideration of a nomination for the peerage. Political parties have a duty to follow the spirit, as well as the letter, of the law and ensure that they are open and honest about the information they provide.

HIGHER HONOURS

35. We recognise that achieving similar clarity in the honours system is more difficult but, as with peerages, reliance on the register of donations is not enough. There should be a more thorough scrutiny process for those candidates for higher honours who have made political donations or may have other financial connections to Government. The current safeguards need strengthening in line with the Appointments Commission's own enhanced processes. It was put to us, including by the Appointments Commission itself, that, since a candidate does not know that he or she is under consideration for an award, the certification process cannot operate in the same way as for nominations to the peerage.[25] In fact, as the Ceremonial Secretariat's written evidence to us shows, candidates for an honour are asked in writing whether they wish to accept their award. It should be possible at that stage to include a declaration form similar to that required by the Appointments Commission from individuals nominated for a peerage or even, if experience shows this is desirable, require such a declaration at an earlier stage in the process.

36. Scrutinising nominations for higher honours to assess the appropriateness of any financial connection or other valuable consideration which may exist between candidates and a political party should go beyond reliance on the Electoral Commission's register of donations even when the legislation is amended to require all loans to be declared. A declaration form, to be signed by the candidate, stating whether or not there are any financial or other connections with a political party which could affect the award of an honour should accompany a "sounding" letter which makes a conditional offer of an award to an individual.

37. It would also be helpful if there was more explicit definition of what constitutes sufficient merit for an award. While contributions to party funds have never been considered a reason to disbar a deserving person from an honour neither have they been considered as according any merit for a person possessed of only some distinction. This formula has worked well enough over the years. However, it seems to us that the ability to make such an assessment has become increasingly complicated by awards made to individuals who also support particular government policies or programmes, especially ones where there is a requirement for financial sponsorship or the taking up of contracts by the private sector to ensure the policy succeeds. Press reports have quoted "senior" Downing Street sources admitting a linkage between support for city academies and the award of a peerage to ensure political support for this initiative in the House of Lords.[26] It is then a fine judgement as to whether awards which include such contributions are entirely for services to education, health or other areas of public life or are more closely connected to party advantage. We believe that an assessment of whether an individual is of sufficient merit for an award should include not just contributions to party funds but also whether a nominee has contributed to or supported government programmes in a material way. This might include, for example, sponsorship of city academy schools or a contract to supply government services. There may well be good grounds for honouring those who have contributed to government programmes, but the process for the assessment must be transparent.

38. Greater transparency in the process would, in our view, also help to allay doubts over certain awards. In our report in 2004 we recommended that citations for all honours should be published. Recent events have only added force to our argument. Once again we would strongly commend this approach, at least for the higher honours.

39. A remaining consideration is which body would be best placed to undertake this enhanced scrutiny process. Containing former members from and exercising most of the functions of the PHSC, the Appointments Commission would seem well placed to take on the task. However, there is an equally good case for the now revamped honours committees taking on this role. They would be able to assess candidates against the wider field of candidates. Consideration should be given as to whether the Appointments Commission or the honours committees should undertake this enhanced scrutiny process.

11 Cmd. 1789, Note of Dissent, p 13 Back

12 Ibid., p 14 Back

13 HC (2003-04) 212 para 88 Back

14 Oral evidence taken before the Public Administration Select Committee on 16 May 2006, HC (2005-06) 884-v,Q 256 [Sir Gus O'Donnell] Back

15 Ibid., Q 258 Back

16 Ev 12 Back

17 Ev 17 Back

18 HC (2005-06) 884-v, Q 299 Back

19 Oral evidence taken before the Public Administration Select Committee on 27 April 2006, HC (2005-06) 884-iv, Qq 228 and 229 [Sir Alistair Graham] Back

20 HC (2003-04) 212 para 164 Back

21 Ev 27 Back

22 Ibid. Back