UNCORRECTED TRANSCRIPT OF ORAL EVIDENCE To be published as HC 1119-i

House of COMMONS

MINUTES OF EVIDENCE

TAKEN BEFORE

PUBLIC ADMINISTRATION SELECT COMMITTEE

 

 

PROPRIETY AND HONOURS

 

 

Tuesday 16 May 2006

LORD STEVENSON OF CODDENHAM, RT HON LORD HURD OF WESTWELL and MRS ANGELA SARKIS

Evidence heard in Public Questions 1 - 96

 

 

USE OF THE TRANSCRIPT

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Oral Evidence

Taken before the Public Administration Committee

on Tuesday 16 May 2006

Members present

Dr Tony Wright, in the Chair

Mr David Burrowes

Paul Flynn

David Heyes

Kelvin Hopkins

Julie Morgan

Mr Gordon Prentice

Paul Rowen

Grant Shapps

Jenny Willott

________________

 

Examination of Witnesses

 

Witnesses: Lord Stevenson of Coddenham, CBE, a Member of the House of Lords, Chairman, Rt Hon Lord Hurd of Westwell, CH, CBE, a Member of the House of Lords, and Mrs Angela Sarkis, CBE, House of Lords Appointments Commission, gave evidence.

Q1 Chairman: Could I welcome our witnesses for the second half of the morning. I am sorry we have kept you waiting. We are very pleased to see you, Lord Stevenson, who chairs the House of Lords Appointments Commission; Lord Hurd, who sits on the Commission; and Angela Sarkis, who sits on the Commission as an independent member. Thank you very much for coming. You know why we have asked you. Would any of you like to say anything by way of introduction?

Lord Stevenson of Coddenham: I do not propose to summarise the paper we have let you have but I think one or two short observations might be helpful. Can I say first of all, I know it is a truism, a cliché, to say how much we welcome being here but as a matter of fact, after the events of the last six months, we very much welcome being able to explain what we do to this Committee, and when I have finished my brief introductory comments, we will endeavour to answer any questions the Committee puts to us, subject only, of course, to the duty of confidentiality we have to nominees. I will make observations about the work of the Commission under three heads: first, our composition; second our role; third, our processes. We were set up in 2000 by the Prime Minister as an independent Commission with seven members, three nominated by the three main parties, four independents selected by competition. One of the four independents, Deirdre Hine, stood down last year because of other commitments. That is the composition. I am extremely pleased to have one independent and one political member here, which I think gives you a full hand to deal with. Secondly, our roles. We have two roles. The first role is that of nominating to the Queen non-party political peers, which has until the last six months been the major thing we have done, but that, I understand, is not what we are discussing today. The second is vetting the political list for propriety, and I think it is worth saying a word or two about the difference between the two roles, because it is an important one. With the non-party political peers, we select them; we are selecting them and nominating them to the Queen. With the party-political list, they are selected by the political parties co-ordinated by Number 10, and we are vetting them for propriety; we are not playing a part in the selection. It is an obvious distinction but a crucial one, I think, in discussing it. Propriety is in the eye of the beholder. It is a matter of judgment, and I think it is worth sharing with you how we have interpreted it. We have tried to look at it. We have discussed it at two levels: one, we need to satisfy ourselves that a given nominee is of good standing in the community, both in general and with regard to the regulatory agencies in our society. Second, we want to satisfy ourselves that a given nominee is credible. Again, credibility is a matter of judgment, and these are judgments. The broad test we work to is to convince ourselves that a given nominee will not diminish, demean, but will enhance the House of Lords and its workings and the workings of the honours system. With donors who are nominees for party-political peerages, we also address the question of whether that person would be a credible nominee if he or she had not made a donation or a loan. That is all I have to say on our roles. On process, our process starts with a bundle of papers from Number 10 and ends when we advise the Prime Minister. So we receive a list from the Prime Minister, co-ordinated through the parties, and for each nominee we have - and you have copies, I think, of the documents - a declaration and consent form signed by each nominee covering quite a lot of subjects which are all set out n the documents, a citation from the party explaining why the nominee is being put forward, and a certificate from the party chairman which sets out the details of any donations, links to the party, etc. They are all set out. We then carry out whatever checks we judge are necessary along the lines that are indicated in the papers, we collate our findings, and we sit and talk about nominees. We will go back and make further checks, follow particular questions if it is necessary, we will then form our opinions, and we will give our advice to the Prime Minister, and I think it is important to stress, because it is something of which there has been a certain amount of understandable perhaps public misunderstanding, we do not have a right of veto; we give the Prime Minister advice, and he is the final decision-taker. You will see from annex B that our approach has evolved as we have gone on. We are constantly seeking to improve the way we do it, and it has changed as we have gone along, and we will continue to do that. I do not think we have reached perfection, by any stretch of the imagination. I would say however that I think it is not unfair to say that our process has been substantially stress-tested over the last few months and we are reasonably comfortable that it has stood up to the pressure. On that note, my colleagues and I are happy to field any questions that you have for us.

Q2 Chairman: Would either of you like to add anything at the outset?

Lord Hurd of Westwell: No, nothing at this stage.

Q3 Chairman: Can I just start by asking about the current controversy. These names have come out, not because of you, and I know that you feel strongly that you have had no part in that. Is this the first time that there has been dispute between yourselves and Number 10 and the party leaders about the names?

Lord Stevenson of Coddenham: Can I say first of all, thank you for the implicit statement you made. Just to be quite clear, you are referring to the fact that the names were leaked, and we have read the rumours and counter-rumours. Just to make it quite clear, we have been in existence for six years, we have dealt with over 4,000 names, four lists, etc. There has never been a leak, and I am robustly confident there was not a leak from us, and it has made our life a lot more difficult as a result. As you are aware, we are bound by a duty of confidentiality not to talk about particular cases. Our advice to the Prime Minister is also confidential, so it would be wrong of me to talk about it. I think it is fair to draw your attention to the fact that the Prime Minister, I understand, has said publicly that he will always take our advice, and that is not a misleading statement. The answer is there have not been significant disagreements. I think it would be fair to say there have not been disagreements. The Prime Minister should be taken at his word: he said he would take our advice and he has.

Q4 Chairman: So any time that you may have raised any question about any names, this has been readily accepted by the Prime Minister and the party leaders?

Lord Stevenson of Coddenham: I think that is reasonable.

Lord Hurd of Westwell: I think there are what one might call "courteous exchanges" before that point.

Q5 Chairman: That is what we want to know about: the courteous exchanges.

Lord Hurd of Westwell: No, no. From the moment that we actually give the advice, in our experience, it has always been taken.

Q6 Chairman: Those of you, like Lord Hurd, who sit on the Commission from the parties, as it were, have not had to make representations to the party leaders about the fact that there were various warning lights flashing about names?

Lord Hurd of Westwell: The Commission has never made any representation to party leaders as a commission. We have confined ourselves to vetting on the lines that the Chairman, Dennis Stevenson, has stated, the names which they have submitted to us.

Q7 Chairman: People are suggesting that over recent years there have been instances which now are causing concern and interest from HM Constabulary, and I wonder whether these have passed through your hands. For example, I am told in relation to two names submitted by Ian Duncan Smith that it was not revealed at the time that the people in question had given loans to the party. Do you know anything about this?

Lord Stevenson of Coddenham: You will understand, Chairman, I cannot talk about specifics, and we are talking about a very few names, so responding to that at all would be to respond to specifics. I think I would make a general observation, since loans have come into the public arena, that the Commission has been briefed on some loans on lists past and present, and has evidently not been briefed on others. We only know what we have been told.

Q8 Chairman: What if the Commission discovers subsequently that information that has been given to it has been wrong or that it has not been supplied with information that would have been relevant to your consideration of a name? What happens then?

Lord Stevenson of Coddenham: That is a very good question, Chairman. I believe it to be the formal answer that our job stops, our remit stops when we send the advice to the Prime Minister and Number 10 and we have no, if I can call it, "post-sales care" jobs of any kind. What I would be bound to say, speaking for myself and my colleagues, is were we to discover that we had not received information, we would have to sit down as a group and talk about it and think about it very carefully, but the formal position is we do not have a role post our advice.

Q9 Mr Prentice: You should have a role, should you not? We have here Dr Chai Patel's letter - I am not going to speak about the specifics, but to illustrate the concern. Chai Patel was put up for a peerage and he was knocked back, and you are not going to tell us the reasons, but you have not told Dr Patel the reasons why you could not recommend his elevation to the peerage, have you?

Lord Stevenson of Coddenham: I think you are asking a general question about feedback. We have, as we have briefed this Committee before, a general policy on feedback, which I might ask one of my colleagues to enlarge on in a moment. In relation to the party-political list, they are very different from our own nominees for non-party politicals, because we are not the decision-takers and therefore we are advising on a decision; we cannot feed back on a decision we have taken because we have not taken a decision.

Q10 Mr Prentice: I understand all that, but there is Dr Chai Patel, and there was a leak, and you tell us, and we believe you, that the leak did not come from your office, but he tells the world that his reputation has been traduced, that he was recommended for a peerage but someone somewhere decided that he did not fit the bill, and he has no recourse. He has told the world that he is unable to rely on the system - and you are part of the system - offering him a fair hearing. He goes on to say, "I would have expected more from a committee of such stature." That is your committee. You talked about post-sales care, but do you owe some kind of duty of care to people like Chai Patel?

Lord Stevenson of Coddenham: We are talking fundamentally about a post-leak situation and there is no question that the leak put people like Dr Patel in a wholly unenviable position and, as we wrote to him, we are very sympathetic to that. The leak was not of our making. We have done our job. We were given a job to do, to give independent advice to the Prime Minister on the political list, and we have done that. It is very difficult to see what else we can do. I deeply regret the leak and I hope very much there will never be a leak again.

Q11 Mr Prentice: You told us that the system has been stress-tested and that it seems to be working well. When you got the certificate of compliance or whatever it is called from Ian McCartney in his hospital bed that everything was in order, and then it subsequently emerged that the treasurer of the Labour party did not know anything about the £14 million in loans, did you not think "Perhaps the system ought to change. We cannot just rely on a certificate from the party chair but we ought to dig more deeply"?

Lord Stevenson of Coddenham: What we actually did, just to be quite specific, before the event you talked about, there was a newspaper story about a loan, and we moved very quickly and asked all three political parties if there were any loans from any of the nominees, and we moved very swiftly - we were at quite an advanced stage of our considerations - to do that. I would simply say to you two things. One, that quite clearly, yes, we should have been briefed, and we and any successors we have should be briefed on loans. Two, if you read - I will not take it out for the moment - the terms in which we brief the parties and individuals, it is made clear in some detail what is expected of them, including that they should observe the conditions of the 2000 Act, the one that affects the Electoral Commission. I think you may take it that, if you read these things, our requirements are pretty strong stuff, they will be redrafted with a very strong banner saying we would expect to be told about anything and everything that could possibly be thought to affect a peerage.

Mr Prentice: That is very reassuring.

Q12 Chairman: Can I just return to our exchange a moment ago. I am still not clear what the answer was. What I really want to know from you is before the current round of controversies - because of the leak we know all about the current names - have there been occasions previously when the Commission has advised against particular names?

Lord Stevenson of Coddenham: No. I think that is correct, but I would rather not be drawn further.

Q13 Chairman: No. I just simply want to know.

Lord Stevenson of Coddenham: No, this is the first... If I could just enlarge, there have been issues - one that I can remember about a particular nominee - which we felt it right to follow through and check certain things. I would draw to your attention that we have insisted on residency as a qualification and paying UK taxes as another. That is an innovation we have made to the system, and I would rather not be drawn any further, Chairman.

Q14 Chairman: Is Lord Ashcroft resident here and paying UK taxes?

Lord Stevenson of Coddenham: I do not know. He pre-dates what I understand from the Cabinet Secretary is called "HOLAC". We do not call ourselves "HOLAC". He pre-dates us.

Q15 Chairman: From your answer I take it that there have been issues that you have flagged up but the issues have been satisfactorily addressed so there have been no outstanding ones in relation to the names. Could I ask Lord Hurd, because you have been involved in the Political Honours Scrutiny Committee that has now been absorbed into the Appointments Commission, and I think one of the interesting questions is, here we have had an Honours Scrutiny Committee since the horrors of Lloyd George; we know that there is a very strong correlation between the giving of money to political parties and the receipt of honours, and yet we have not, through the Political Honours Scrutiny Committee over all those years, had the kind of cases that we have seen this year. What has been happening?

Lord Hurd of Westwell: My memory does not quite go back to the terrors of Lloyd George. No, the Honours Scrutiny Committee was doing basically the same job as has been described, that is to say, it was receiving names through the Prime Minister from the party leaders, it was making checks, it was getting certificates from the Chief Whip in those days, it was considering the results of those checks and it was advising the Prime Minister. The differences are that the present Commission has independent members - we were just the three nominees of the parties, one of whom was the chairman - and it operates in a considerably more thorough and in my view satisfactory way, which is one reason why we on the Honours Scrutiny Committee, as it were, willed our own destruction; we asked really that we should be wound up and the job should be transferred to the body which has been created and is doing similar work, and that was accepted in Hayden Phillips' report and accepted by the Prime Minister. So we were doing the same job. Of course, the main difference is that there were not leaks. The answer to your question is that there were; we had our moments. We had our cases, and our advice was taken, and neither the advice nor the difficulty was leaked, and therefore the individuals concerned were not embarrassed. Could I just add a point possibly on the Patel point? It has worried us all that not just Dr Patel but others have been put in a very difficult position. They or their wives or friends have read their name in the newspaper, and it emerges there are difficulties and they do not appear on the final list. It would be very hard to imagine us, I think, getting into the kind of discussion which Dr Patel clearly wants and felt he was entitled to because of the leak. As the Chairman has explained, we have to exercise our judgment in the area of propriety and credibility, whether somebody is going to by their presence in the Lords lift the proceedings or diminish them or whatever. This is very difficult to discuss with the people concerned. There are plenty of honourable, law-abiding, good people walking the streets who any commission might say there are lots of things they would be good at but being a member of the House of Lords is not actually one of them, but to explain all that in the presence of lawyers and comings and goings is almost impossible. I think that is likely to remain a confidential business. It is actually in everybody's interests.

Q16 Chairman: Just so we are clear about the history, under the previous Honours Scrutiny Committee there were occasions when that Committee advised against certain names, were there?

Lord Hurd of Westwell: Sometimes it is a matter of timing. The question of tax residency is a classic case. That situation can be changed by the individual. So advice which may be cogent at one point on that may change. But there were certainly moments when the old committee, in my time, and no doubt back through the decades, did give advice against the immediate appearance of somebody on that list.

Q17 Chairman: Did the Prime Minister of the day always take the advice that you gave?

Lord Hurd of Westwell: In my time, yes.

Q18 Chairman: This relates now to what you do. As you say, the Prime Minister takes the decision. You only advise. If the Prime Minister says, "That is all very interesting advice but nevertheless, I am going to carry on," what happens then?

Lord Stevenson of Coddenham: It has not happened, Chairman, and it is rather hypothetical. We would have to consider our position, with the options of presumably resigning or going public, or if we thought it was very marginal, perhaps not, but it has not happened, and the Prime Minister has said in public that it is his intention to take our advice.

Q19 Chairman: Surely, the Commission needs to have a position on what would happen. You have suggested that you might resign, you have suggested that you might go public.

Lord Stevenson of Coddenham: I think this is clear. One is dealing with this on a case by case basis and I think you have to look at an actual example and the terms of our advice and the strength of our advice, what it is, because, just being very hypothetical, you could imagine advice where we thought, "We don't agree with him but we can see why his position is not wholly unreasonable." There might be other advice where we had a very strong view against and we would be in a different position and perhaps consider more radical options, but it is hypothetical; it has not happened.

Q20 Chairman: Let me just ask one further question- it has been referred to already by Lord Hurd - which is on the criteria that you use. Looking at these, you talk about there being two really. One is good standing in the community and the other is that the person should be a credible nominee. These are very difficult judgments to make, are they not?

Lord Stevenson of Coddenham: Very.

Q21 Chairman: If the Prime Minister puts forward a completely undistinguished party hack, then presumably this goes through on the nod, does it?

Lord Stevenson of Coddenham: I did make the distinction in my introductory remarks between the non-party political peers and the political list. The non-party political peers, we make the judgment as to their suitability. The party-political peers, the parties make the judgment as to their suitability and we are concerned only with their propriety, and I have defined how we interpret it. So I would not want to get involved in discussing party hacks and "on the nod" but in principle, if the Prime Minister's list contains someone who his party or someone in another party judges as suitable, and if we then judge that they pass our propriety test, we would recommend them.

Q22 Chairman: If the party leader puts forward a name of someone who is distinguished only by their lack of distinction, they are in every ordinary sense incredible nominees, but they are not contaminated by donation, then they go through on the nod, do they not?

Lord Stevenson of Coddenham: We would consider them properly, vetting them for propriety, and if they pass the test, yes. We do not have a brief to check them for suitability or parliamentary talents or legislative talent.

Lord Hurd of Westwell: It is not just donations. Our test goes wider than donations.

Q23 Chairman: Yes, they are not in trouble with the tax authorities and they have not fallen foul of the regulators and all that, but apart from that, they have done nothing to distinguish themselves in life, they will sail through, but if someone has given some money, you will start looking at them.

Mrs Sarkis: We are only a part of the process. The parties have to take responsibility themselves for the quality and the standard and suitability of the names they are putting forward. We have to really emphasize, we receive a list of names with the accompanying paperwork, and that is our part in the whole process. So we do not have a role in looking in advance as we do with our own nominees. That is a totally different ball game. The public record is there, which suggests that we have been successful in how we have looked at our own independent nominees, in that we have been incredibly careful to vet them very carefully.

Q24 Chairman: If a party leader says to an MP "You give up your seat to us and we will put you in the Lords," - I am told this happens, and has happened regularly for years - does this come to your attention?

Lord Stevenson of Coddenham: No.

Mrs Sarkis: It is a matter for them.

Lord Stevenson of Coddenham: It is outwith our brief. Our brief is to vet the political list for propriety.

Q25 Chairman: So people can sell their seat, but they cannot donate money without being scrutinised by you.

Lord Stevenson of Coddenham: It is your language, Chairman. It is reasonable to conjecture that if we found that, in some sense of the word "sold", someone had sold their seat, it would be reasonable for this Commission to look at that under the propriety test, but as a general proposition, going back - and you are describing someone who I am sure does not exist, some very straightforward, undistinguished, completely honourable MP, but who in your judgment, in this hypothetical state, might not be someone who would contribute a great deal to the House of Lords - having checked that that person passed our propriety tests, that would be it. We do not have a brief to assess people for what I call suitability.

Q26 Mr Prentice: If an academic were to look at this matter and to find that almost every retiring MP who announced the retirement once the whistle had been blown for a General Election found themselves magically in the House of Lords, you would want to look at this?

Lord Stevenson of Coddenham: I think you raise a very interesting scenario.

Q27 Mr Prentice: This is not rocket science. You are the man responsible for all this and I am saying that you would want to look at this if someone gave you the figures.

Lord Stevenson of Coddenham: I go back: our brief with the political list is to test for propriety, to vet for propriety, and therefore, to the extent that someone showed us something which was prima facie improper and therefore would mean that that person or those people might be thought to be going to diminish the reputation of the House by going there, yes, we would.

Q28 Grant Shapps: Can you remind us how members of your Commission are made up, other than the political members, how you are actually appointed? This question could be to Angela Sarkis.

Mrs Sarkis: There were originally seven members of the Commission. There are now six because one has stepped down early through other pressures of work. The political nominations...

Q29 Grant Shapps: Those I understand. I am interested in the so-called independents.

Mrs Sarkis: We were appointed through open competition. The jobs were advertised. We applied for those jobs and went through the normal process of application.

Q30 Grant Shapps: The Prime Minister plays what role in that?

Mrs Sarkis: It was his office who actually did the recruitment.

Lord Stevenson of Coddenham: To be very precise - and I do not quite know who within government did it - there was a rather intimidating interview panel chaired by the then Head of the Civil Service, Sir Richard Wilson. I imagine that panel then made a recommendation to the Prime Minister but that was exactly what happened, and there were head-hunters, you will not be surprised to hear.

Q31 Grant Shapps: The answer, as I understand it, is that you are in fact appointed by the Prime Minister but via that panel.

Mrs Sarkis: That is correct.

Q32 Grant Shapps: So in a sense, we do have the Prime Minister's own people to an extent sitting on a committee to decide on appointments which quite often will come via the Prime Minister. So there is a little bit of a circular connection here, is there not?

Mrs Sarkis: No, I do not accept that at all. We are certainly not the Prime Minister's people. We are incredibly independent individuals. I can give you my assurance of that. But that apart, we recognise and take that role very, very seriously, being independent on this Commission. We know the importance of the work. We have already been discussing the significance of what we do. We need to ensure that the independent people are bringing an independent view and an independent perspective, which at times will be different to the political appointees.

Q33 Grant Shapps: Nonetheless, we must accept that the Prime Minister must have liked you at the point that he appointed you, otherwise there would be no point in him having appointed you.

Lord Stevenson of Coddenham: Does the Prime Minister know you?

Mrs Sarkis: No, he does not.

Lord Stevenson of Coddenham: I see where you are driving to. I just do not think it is right actually. It was very remote from the Prime Minister. The Head of the Civil Service did it. It was unbelievably post-Nolanesque proper, and we have operated very independently and we have no complaints.

Q34 Grant Shapps: Thanks to this leak in fact we have seen the demonstration of your independence. It just occurred to me that might be in the same way that members go to the House of Lords, politically appointed, and then end up being terribly independent because they are there for the rest of their lives. Do you consider that there is ever a sense of civic virtue in giving money to political parties?

Lord Stevenson of Coddenham: Gosh! Can I say I think the issue as to the ethics, the civic virtue or whatever the expression was you used to the Cabinet Secretary earlier on, is not a matter for this Commission. We have a narrow job that starts when we receive the names from Number 10 and send the advice in. We might individually have our own views about the funding of political parties, but as a Commission we do not.

Q35 Grant Shapps: Let me ask it the other way around. Does it rule out an individual now?

Lord Stevenson of Coddenham: No, donations and loans absolutely are not a means, with any automaticity, of getting a peerage, but they are not a bar to getting a peerage, and to some extent that is what we exist for.

Q36 Grant Shapps: Just to understand this process, if you had a candidate in front of you and you could not really determine any other reason why this politically suggested candidate had been placed in front of you other than the fact they seem to have given £1 million or £2 million to a political party, you would then automatically reject them?

Lord Stevenson of Coddenham: We would not reject them. In that hypothetical situation, we would be likely to advise the Prime Minister in the terms that it was difficult to see that they were a worthy candidate.

Q37 Grant Shapps: That type of hypothetical situation is the type of thing that we may have seen in recent times.

Lord Stevenson of Coddenham: You may have done, yes.

Q38 Grant Shapps: Would you say that, as a Commission, you have become more activist in your role?

Lord Stevenson of Coddenham: What do you mean by "activist"?

Q39 Grant Shapps: Simply that if you go back a few years, it is quite clear the politically appointed people who had donated money could still make their way into the Lords. It seems that now, certainly in the last year, it is almost impossible for that to happen because you are much more activist than you were.

Lord Stevenson of Coddenham: No. I am very glad you asked the question. To make something absolutely clear, we have not by dint of what has happened over the last six months acquired sharper teeth or been more activist or tougher. It just happens that the list we have received, which most unfortunately was leaked, which made the whole process infinitely more difficult for everyone, contained a number of people about whom we advised the Prime Minister in a certain way and we did not see previous lists as having people about whom we would give that advice. We have not raised the strength of our scrutiny.

Q40 Grant Shapps: I hear what you are saying but there is something which does not add up here. On the one hand, you are saying that there was never a time in the past where your recommendation to the Prime Minister was not accepted; in fact, you went as far as to say if that had ever happened, you might want to consider resigning or going public or something else. So you are very clear that your recommendations have always been accepted, but on the other hand, we know that you have, quite rightly, in recent times - you have suggested that that hypothetical might be true - actually prevented people who have given money and apparently done nothing else from getting a peerage. How can both be simultaneously true? In the past we know that people have been made peers because of the money they have given to political parties, and yet you say you have not become more activist. You must have become more activist in your approach.

Lord Stevenson of Coddenham: No. If I go back to the fundamentals, the dialogue we had a moment ago, giving a donation or a loan does not ipso facto rule you out of getting a peerage, nor, ipso facto, does it get you a peerage. It is our job to vet for propriety people who come on political lists and with particular attention but not exclusive attention to those who have given donations or loans, and I have shared with you the judgments we make in doing that, and that means that some people who have given loans/donations we will see as credible nominees and others we will not. To go back to the question, these are subjective judgments. I do not see us as having become more or less activist.

Lord Hurd of Westwell: What we have done is we have continually tried to tighten and complete our procedures. The Chairman has already given one example, which concerns loans. We are now removing any conceivable scintilla of doubt - we do not think there was a reasonable doubt, but in future there will be absolutely no doubt that loans have to be declared in the certificate we get. Another change we have made which has not been mentioned is we decided to shift the requirement from the Chief Whip to the chairman of the party. Why? Because - and this was our experience on Honours Scrutiny - the Chief Whip does not always necessarily know. He knows the parliamentary aspect, but that is only one aspect. We thought that the chairman of the party was more likely to be in a position to be able to sign a certificate in good faith on the whole range of political activity, and that was a change which I think tightened it up. So we may be becoming more effective by tightening our own procedures.

Q41 Grant Shapps: So let me understand this correctly. You are saying you do not regard yourselves as becoming more activist as a Commission, but you do think that the rules that you have adopted have tightened up, which might actually in effect come to the same thing. You are giving us a patchwork picture of your work and, for reasons of confidentiality, you cannot fill them all in, but at the same time, you are asking us to believe that it is only in the last set of nominations that four people were effectively rejected, that you have never recommended rejection prior to that, and that the Prime Minister has always agreed with your recommendations. That makes it sound like it is only recently that you have started rejecting on the grounds of cash.

Lord Stevenson of Coddenham: I understand that and, just to recap, there is a paper which sets out the evolution of our processes. It is very clear and, as Douglas has said, we have tried, frankly, to remove ambiguity. There was ambiguity as to what a donation was: if people were giving money from their companies or overseas trusts or whatever. We should be as specific as possible. If I can be very specific, at the time we did that, we were just as watchful for those kinds of donations as we are today. So I really do not think we have become more activist. I think perhaps we have learned how to be more systematic. I would accept that completely.

Q42 Chairman: Just on Grant's earlier question, Jack Straw was on the Today programme this morning. His strong argument was that giving money to a political party is a good thing to do. It is, in Grant's language, an act of civic virtue. As Gordon will remind us in a moment, we have the Prime Minister saying that people who give money to government programmes like academies ought to be in the Lords because these are good people doing good things. Yet your approach is to regard a donation as a potential disability.

Lord Stevenson of Coddenham: No. There is no automaticity either way. Our job is to vet everyone on the political list for propriety and, for very obvious reasons, we have obviously looked very hard at people who have given donations or made loans. It is not a disability. It is no bar in either event.

Q43 Chairman: Your form of words is you assess whether or not an individual could have been a credible nominee if he or she had made no political donations.

Lord Stevenson of Coddenham: Yes.

Lord Hurd of Westwell: It is not a qualification and it is not a disqualification.

Q44 Chairman: No, but it is not regarded as an act of civic virtue, is it?

Lord Hurd of Westwell: Not an act of civic virtue to be rewarded by a seat in the House of Lords.

Q45 Chairman: If it is an act of civic virtue, as Jack Straw and the Prime Minister argue, to give money to political parties and to government programmes, this surely then should be reflected in the honours system, the criteria for which are set by the Government, and in your consideration of nominations for the House of Lords.

Lord Hurd of Westwell: There are lots of acts of virtue which do not necessarily lead to the House of Lords.

Q46 Mr Burrowes: In terms of the concern about political donations, you are saying there is concern in terms of the credibility in terms of significant political donations. Is there then a sliding scale, as to a high level of donation raises a concern but if it is a small level, there is not a concern?

Lord Stevenson of Coddenham: No.

Q47 Mr Burrowes: The amount or timing of a donation does not have a bearing?

Lord Stevenson of Coddenham: You have asked two different things. As a practical matter, I think I am right in saying that if someone has given less than £5,000, they do not have to declare that donation to the Electoral Commission, although - again, I am speaking from memory - I think you will find, and I applaud it, that quite a number of our nominees will actually tell us they have given £1,000 or whatever or gifts in kind, etc. I cannot remember us taking views on quantum. Timing is a different matter. Timing is relevant. If someone had given a huge donation the day before a nomination went in, we might have a view on that or it might affect things.

Q48 Mr Burrowes: Just taking it wider, you say that on the grounds of the criteria, any sort of relationship could affect a peerage, and that no doubt covers financial or other support for government project or benefiting from a government contract by a nominee. Is that all covered?

Lord Stevenson of Coddenham: If you read through what we require of the parties, and we require of individuals, it is pretty sweeping although, as I said to Mr Prentice, I think there will be some letters in bold type in capitals at the top saying that, in the spirit of the matter, we expect to be told about anything that conceivably be thought to affect a peerage, or words to that effect. On the issue that you raise, which has come up in conversation, of contributions to government programmes, and reference I think has been made to academies, I think it is probably accurate that we have been told about all such donations to government projects, and certainly academies, in the citations, and in any event, they have been very much in the public domain, so we have known about it.

Q49 Mr Burrowes: Not just financial; other support. Are you confining yourselves purely to financial relationships?

Lord Stevenson of Coddenham: If I read this out, when the certificate that the party chairman sends for someone who has given a donation, it says, "1. The individuals have made donations (in money or in kind) either directly or indirectly, to the Party or political fund. I have detailed the nature of this contribution... 2. There is no personal financial relationship between the named individuals and any senior Party member. 3. The recommendations are not associated, directly or indirectly, with this contribution or the expectation of a future contribution the Party, political fund or to a senior Party member. 4. Those names are resident in the UK for tax purposes and intend to remain so or are willing to become so upon appointment." If you read the guidance to the chairman of the party, it is very explicit to follow the 2000 Act and the criteria for the Electoral Commission. That does not talk about moneys that nominees may have given to charities, to other government programmes, etc, and as a matter of fact, I think we as a Commission would not expect a party chairman, if someone had given half a million pounds to charity or whatever, unless there was a personal relationship with a politician, which is covered here. What I think it is fair to say is that we have a very comprehensive picture, normally because we have been told it, but if not, nowadays you can find out exactly what people are given and what they have done, about all the nominees, so we will know what donations they have made, both to things inside government or outside government.

Q50 Mr Burrowes: But in terms of in-kind support for government projects, is there not a duty on that nominee to disclose that, and that is a level of interest that you would have?

Lord Stevenson of Coddenham: I think actually you get on to very tricky ground when you are talking about a political list. It is clearly quite right that we get the last cent of money and in-kind support to the political party, directly or indirectly, and all the right language is there. I think as a matter of fact we know, because we can find out, and normally people tell us as part of their citation what other moneys they are giving in other places. I cannot think of a hypothetical example, but I imagine the donors to academies give money rather than things in kind but they may give things in kind. If they were giving substantial moneys or in kind, I would expect us to have found that out, but we do not require that of them, although we tend to know about it.

Lord Hurd of Westwell: If such cases came before us, if someone was nominated, and part of the reasoning was that they had given a great deal in time, effort, money to say the regeneration of Liverpool or a big city through all kinds of means, that would be one thing and we would regard that as a plus rather than a minus, I think, when the test of credibility came, but if it came to our ears that before they had done any of that they had been promised a peerage, that would be an entirely different situation. We have not actually had to consider a case of this kind. That is the sort of way we would look at it.

Q51 Chairman: If they know they are more likely to get a peerage if they do such things, it is not a question of a promise, is it? It is that they know how the system works.

Lord Hurd of Westwell: Expectations sit in the air. I think a promise is the important point, is it not, or a half-promise, a wink and a nod? These are the things we would have to judge in each particular case.

Q52 Chairman: When you were answering David just now, you did not mention loans explicitly.

Lord Stevenson of Coddenham: I did.

Q53 Chairman: In relation to the names that have caused all the trouble, it is not the case that loans figured in those assessments, is it, because all the loan argument only blew up subsequently?

Lord Stevenson of Coddenham: With one exception, which happened afterwards. I do not want to get drawn into particular people.

Q54 Chairman: Are you revising what you are doing about loans?

Lord Stevenson of Coddenham: We already require the parties and the individuals to comply with the 2000 Act in the same terms as the Electoral Commission does, and that of course brings one into the tricky area of what is a commercial loan. Under that, we would expect the party and the individual to tell us of any loans that were not strictly commercial, and indeed, some have. We have been briefed on some and not on others. We have not had the opportunity but we will, as a Commission, be sitting down in a reflective way and looking at the totality of our process with a view to trying to improve it for the future. We have not discussed it but I think it is likely that we will say we just want to know about any loans, commercial or non-commercial, for the avoidance of doubt. We have formerly required people to tell us about loans under the 2000 Act.

Q55 Jenny Willott: I just have two sets of questions. The first one is about the decisions that you make on individuals. Do you arrive at these decisions on the basis of consensus? Has there ever been divergence between the independent members of the Commission and the party political appointees?

Lord Stevenson of Coddenham: The short answer is, as it happens, we have had a consensual view throughout our history. It does not mean to say we would not have to vote at some point but we have not.

Mrs Sarkis: We certainly do have consensual views but we certainly also have quite rigorous discussions as Commission members. I would not necessarily say that has been on independent or party lines actually. I think it is more to do with different experience around the table. There are different ways we would put on the evidence that we have before us, because we do seek a lot of evidence from various places, and then it is a question of weighing it all up, and listening to colleagues who have other experience or other knowledge.

Q56 Jenny Willott: Do you do more checks on some nominees than others?

Lord Stevenson of Coddenham: It is a case by case thing.

Q57 Jenny Willott: If something comes out after you have given your advice to the Prime Minister that would have affected your decision, is there anything you can do at that stage? What steps would you take?

Lord Stevenson of Coddenham: As I think I or one of us said in response to an earlier question, if the human being has been nominated to the Queen and ennobled, there is nothing formally we can do about it. If something were to come out before the Prime Minister had made up his mind, I think we would tell the Prime Minister very swiftly. The answer is if the peerage has been bestowed, we cannot do anything.

Q58 Jenny Willott: Has it ever happened that after you have made a decision you have discovered more information?

Lord Stevenson of Coddenham: It has happened that before the Prime Minister has made up his mind we have discovered more information. I would rather not be drawn.

Q59 Jenny Willott: Can I ask about closing loopholes, because clearly, you do try to identify and close loopholes.

Lord Stevenson of Coddenham: We do try to, yes.

Q60 Jenny Willott: Absolutely. You went looking for the issues, for example, about paying taxes and being resident in the UK. There were two elements that I wanted to ask. One David has already touched upon, which is less obvious financial relationships. Would you consider looking at a relationship in terms of government contracts between an individual who has been put forward for a peerage that has a relationship with a political party? Would you ever consider that?

Lord Stevenson of Coddenham: I think that if we were looking at someone who was involved in a company that had an important financial relationship with the Government, we would expect to be told about that in both the party citation and the nominee's own citation, and I am about to venture a little further and say I would hope that, if we were not, we would be savvy enough to notice it for ourselves. It is quite a small, centralised country. If a company is dealing with the Government, it would be quite well-known.

Q61 Jenny Willott: Are people open and honest with you in providing that sort of information?

Lord Stevenson of Coddenham: Broadly, yes.

Q62 Jenny Willott: The final element is about the convention that Ministers in the Lords are exempt from vetting. Do you think that this should change so that they are vetted as well, given that the loopholes that exist seem to be abused often? Do you see this as a potential future area?

Lord Stevenson of Coddenham: Our brief does not contain taking views on these matters. We are an independent body set up by the Prime Minister, who has created our terms of reference. We are not the statutory commission that, for example, Wakeham considered, which might take views on that. The Commission as a whole does not have a view. I think it is fair to say various individual members might be broadly sympathetic to the view you are putting across, but the Commission as a whole does not have any right to hold that view.

Q63 Jenny Willott: Do either of the others have any comment to add to that?

Mrs Sarkis: I think I agree with the Chairman. These are questions which might perhaps be properly looked at as the consideration happens of the reforming of the House of Lords.

Lord Hurd of Westwell: Particularly in this age of very rapid ministerial shuffles.

Lord Stevenson of Coddenham: We do not have a formal position but it is a non-trivial question.

Q64 Jenny Willott: The final thing is: are there any other loopholes that you are aware of that you are trying to close at the moment?

Lord Stevenson of Coddenham: If I say "no", I am hung either way, am I not? All I can say is we are doing our best. You will have seen from annex B that we have tightened it and tightened it. I have already referred to the fact that I do think that in future we should ask for all loans. I do not personally take the view - this has not been discussed by the Commission, but I think that if someone has made a loan to a political party, and even at the most usurious rate of interest, I think if that person is then nominated for a peerage, we would like to know about it; it is relevant. The party might not obtain money in any other way. I think that is something worth closing. I cannot think of any other loopholes, but I am sure they will emerge; they always do.

Mrs Sarkis: We have actually had six lists so far, and after each of those we have revised what we do and our processes to tighten up each time, and I am sure this one will be no exception. One of the things we will also be wanting to do is to make our information more explicit on the website so that the public are better aware about our processes and how we work.

Q65 Jenny Willott: Does that suggest that there are people on each list that you have been given that, had you changed the rules prior to the decisions you were making, you would not have recommended to the Prime Minister?

Mrs Sarkis: No, it does not. What it has made clear to us is that the system could have been easier to understand for people outside, and in particular the public, who are not always aware of what we do.

Q66 Chairman: On the question of exemptions and loopholes, am I not right in thinking that the Resignation Honours List is exempt from your scrutiny?

Lord Stevenson of Coddenham: I think the presumption is made about MPs, unless one of them was obviously moneyed, that we do not apply the same test that we would to someone who had made a donation.

Q67 Chairman: What I am thinking of is the prime ministerial resignation list. If you think of the disrepute into which the honours system was brought by Harold Wilson's famous lavender list, it is possible that such a thing may happen again.

Lord Hurd of Westwell: We have not had one, have we?

Q68 Chairman: We may never get another one! My understanding is that these do not fall under your scrutiny.

Lord Stevenson of Coddenham: I hope you are wrong. It is embarrassing for me, because frankly, I think they should. I think it does, actually. I think this will fall under our scrutiny but I am rather embarrassed that I cannot give you complete certainty. I will follow it up afterwards and give you complete certainty. I think you are wrong.

Lord Hurd of Westwell: The Prime Minister has specifically said that he reserves - I am now going on to non-party peers - the right to put ten people into the Lords, not taking a party whip but non-party peers, but they are of course vetted.

Q69 Chairman: Please go away and look at this. My understanding is that the resignation list does not fall to you to be scrutinised. I am interested that you would feel it to be an omission if that were the case.

Lord Stevenson of Coddenham: We will write to you formally with our understanding of it.

Q70 Chairman: If you discovered that was the case, perhaps you would be making representations that it should be covered.

Lord Hurd of Westwell: Talking about loopholes or gaps, I think a big gap - and this is a personal view - is that we ought to be a statutory body. Not we ought to be, but there ought to be a statutory body. Your kind of point and one or two others that come up are really matters that ought to be settled by Parliament when a body is established, and then it can go ahead and operate. To some extent we have been making our own rules, improving our procedures and so on, but I think it would be a happier situation, whatever else happens about the Lords, if there are going to be appointed members of any kind, an appointments commission will be needed and it should be set up by statute.

Chairman: Yes. I am grateful for you saying that.

Q71 Julie Morgan: What sort of time do you spend on these decisions, for example, this recent disputed group that unfortunately was leaked? Can you say generally how long you spent discussing these particular issues?

Lord Stevenson of Coddenham: The last few months. If you had asked me or any of us that question a year ago, we would have given you a different answer. There have been no general rules. We have spent a huge amount of time over the last few months on these decisions, with innumerable meetings and a huge amount of staff time. There are not any general rules. With the previous lists, we have done our vetting processes thoroughly but there have not been as many difficult decisions to take. I am afraid I cannot give you an answer.

Q72 Julie Morgan: If you have had a difficult decision, you have spent hours, days?

Lord Stevenson of Coddenham: At various points the system, by which I do not mean just the political system, but the expectation is of a turn-around of these things very quickly, and somehow the fourth estate learns there are lists and on it goes, and although it has disappeared now, there was a definite feeling in the air we were dragging our feet, delaying things, in the three months after Christmas. As far as we were concerned, we took the view we had to discuss it, because people were saying, "Hey, what's happening?" We took the view we would take as long as necessary to do the job properly, and that will be the view we will always take.

Q73 Julie Morgan: But you were aware of outside pressure.

Lord Stevenson of Coddenham: Yes. There was no insidious pressure, I hasten to add, and no pressure that I can remember from the heart of government, but just expectations, and it being in the atmosphere, and people saying, "Where is that list? They are dragging their feet," etc.

Q74 Julie Morgan: Do you ever feel uneasy about sitting in judgment on people?

Lord Stevenson of Coddenham: That is a long question! You put the question in a general way, and I will take it in a general way, because, like all of us in this room, I make judgments that affect people all the time, and of course, the answer is yes, making judgments that affect human beings, whether it is in your place of work or one's children, it is a great responsibility.

Q75 Julie Morgan: Do you think that there is a case for not so many judgments to be made, and that it would be better in fact if people were elected to the House of Lords?

Lord Stevenson of Coddenham: That is a space into which I have to say I am not going, Chairman. I am very sorry.

Q76 Paul Rowen: In annex B you state that you carried out a substantial review after the 2004 list. What was the reason for carrying out that substantial review?

Lord Stevenson of Coddenham: As a general case, we would always review what we are doing at appropriate points, and a very obvious appropriate point is when we have done a list, no more and no less than that. We will be doing that now, not just because it has been a particularly time-consuming list but just as a matter of principle, going back to the discussion about loopholes, because we are just trying to improve it as we go along.

Q77 Paul Rowen: So you have no concerns about the 2004 list that led you to tighten the criteria, as you have done here?

Lord Stevenson of Coddenham: No, we were not carrying out a review because we had specific concerns. We were trying to apply what we had learned as we were going.

Q78 Paul Rowen: I know in the new criteria it does talk about money and donations in kind. When did you first become aware that loans might be an issue?

Lord Stevenson of Coddenham: I think I said earlier on, and it is important, that we have known about some loans. We have asked people to tell us about loans, and, surprise, surprise, some have, and they have been considered. We have known about the terms of the 2000 Act. When did we become aware of the saliency of loans in the most recent list? When we read that a particularly large loan had been made by one nominee, and that is when, as I said earlier on in response to a question, we moved very fast and got round all three political parties asking, which we had to do. It was rather late in the consideration and we had to move very fast to find out. But we have always known about loans and they were in the 2000 Act.

Q79 Paul Rowen: You say you have asked people. Do you actually interview people who are being considered for a peerage?

Lord Stevenson of Coddenham: With the non-party political peers we have interviewed them, and in many cases more than once. For the vetting of political peers, only by exception; when there are particular situations where we need clarification or whatever, we will interview or talk to people. We reserve the right always to go back to people and say, "Hey, what do you think about this?" or whatever. It is the exception rather than the general rule.

Q80 Paul Rowen: You state in here that, rather than ask the Chief Whip, you now ask the party chairman. Do you think that is the appropriate person or do you think the net should go wider in terms of who might be involved who may know about certain things?

Lord Stevenson of Coddenham: It is a good question to which I do not have a well-rounded answer. It is the kind of thing we will be reviewing.

Q81 Paul Rowen: In the light of what has become public knowledge recently, have you had a retrospective look at some of your appointments to see whether they would meet the new criteria?

Lord Stevenson of Coddenham: The new criteria?

Q82 Paul Rowen: The one you have for this year's working peers list and perhaps the ones that you may be wanting to introduce next year.

Lord Stevenson of Coddenham: No, is the short answer. As I said, our job finishes with the advice we give.

Q83 Paul Flynn: I was surprised at your answers; you are not contrite about your past behaviour. Your first list you produced of people's peers were widely regarded as being peers' peers. Do you not regret that? With the exception of Baroness Findlay, lots of them took a long time to make their maiden speeches and then did very little after that. Was it not a bit of a horlicks?

Lord Stevenson of Coddenham: I certainly learned, Chairman, not to venture any views about hairdressers. I would just say, and it is not what we are primarily discussing, that if you look at the recent debate on Assisted Dying for the Terminally Ill Bill, you will find a number of the non-party political peers who spoke making some quite outstanding contributions, and I think there is now enough evidence of the vast majority of the 36 - now, sadly, 35 because Michael Chan has died - of the peers that we recommended to the Queen making a very substantial contribution. We are broadly comfortable and again, we can always improve; we can always do better.

Q84 Paul Flynn: You said after you were challenged on this that you could not appoint someone who was, for instance, a bus conductor or a hairdresser or a waitress because they would not have the self-confidence to stand up in the House of Lords and make a speech. Speaking as an ex-bus conductor who married a waitress...

Lord Stevenson of Coddenham: Can I say that I do not wish to be drawn, and I learned from that experience how unwise it was to be drawn on those issues. All I would say to you, very seriously, is that it always has been the case and continues to be the case that anyone can apply to be a peer, and we have criteria which are publicly available that anyone can look up on the website or be sent the printed document which we apply even-handedly to anyone who applies.

Q85 Paul Flynn: Finally, has the Queen ever turned down one of your nominations? If she did, what would you do?

Lord Stevenson of Coddenham: I will have to take refuge: I have no idea what the constitutional niceties are in replying to that question. I think you can guess the answer to that but I would rather avoid it, if I may.

Chairman: You do not need to answer that.

Q86 Mr Prentice: I feel as if I have squeezed the orange dry but I am going to have one more go. I am going to ask Lord Hurd. When I was asking Gus O'Donnell, the Cabinet Secretary, about whether it was legitimate to ennoble sponsors of city academies, I saw you shaking your head. Why were you shaking your head?

Lord Hurd of Westwell: It must have been just preparatory to blowing my nose. I have no recollection of that. I think it is a highly improper question!

Q87 Mr Prentice: I am just going to stick with this for 60 seconds because it is so important. We have a police investigation on city academies. Let me put it this way, and I put the same question to sir Alistair Graham: if there were, as there will be, Conservative governments in future, and if they had a policy - they do not at the moment but it may change - to promote grammar schools, would it be legitimate to ennoble people who had endowed grammar schools and to make it clear, explicitly clear, in the way that 10 Downing Street has made it clear in the case of city academies, that it is perfectly legitimate to put people in the House of Lords who have given money, sponsored something that the Government approves of, in this case grammar schools, in the present Government's case city academies?

Lord Hurd of Westwell: My own view is simply this. If there is a public policy which a government has proclaimed and which Parliament has approved, which is public policy, which requires all kinds of help, as most public policies do, from people outside government, sometimes in terms of money, sometimes in terms of work or public support or whatever, I see no reason why that support for a public policy approved by Parliament should not be included in a citation for a peerage. It has to be vetted in the usual way and I do not see anything wrong with it.

Q88 Mr Prentice: So people involved in the private sector in medicine who were involved in the development of the private sector in the NHS, they could legitimately be rewarded with a peerage? That is the stated objective of the government of the day, that 15 per cent of the NHS should be run by the private sector, in inverted commas.

Lord Hurd of Westwell: All I could do would be to repeat what I have already said.

Q89 Mr Prentice: My final question is this: were you shocked and surprised when the police got involved in this business?

Lord Stevenson of Coddenham: "Shocked" is an emotive term. I think the answer is we just got on with doing our job, and our job, which is what we are here to respond to questions on, is vetting that list we get from Number 10 with the paperwork, which goes back with the advice to the Prime Minister.

Q90 Mr Prentice: Is there an issue here for the police or has it all been blown out of...

Lord Stevenson of Coddenham: I have no idea. We cannot comment on it. A lot of public attention has focused on what we are doing, but it is quite a narrow bit of the chain, and frankly, personally, and I doubt whether my colleagues - and I do not wish to shut any of my colleagues up on this - I do not feel able to take a view on that. I really do not. I do not have enough knowledge.

Q91 Chairman: Does Lord Hurd have a view?

Lord Hurd of Westwell: We have a system about peerages, we have a system about honours, which I think is pretty good and I do not think is in either case corrupt, any more than I think the election system is corrupt because there are occasional cases of breaches of election law. In these last months there have been suggestions that the law which was put in place to deal with the terrors of Lloyd George has been breached. That is a matter for the police, and that is the legal side of it, a possible criminal offence, which is being investigated. The Appointments Commission is charged with a different part of the thing. We are not in charge of policing the 1925 Act; we are in charge of propriety, in the way that we have explained. So the two are not in conflict and, it seems to me absolutely right, as the Cabinet Secretary said, that your Committee should continue investigating the kind of area which you have been investigating, including us, alongside the police, and not be deterred from doing your duty because there is a criminal investigation in another part of the field.

Q92 Mr Burrowes: In your vetting procedure, in looking through applications, if it became apparent that there was, in your view, potential criminality, would you feel obliged to refer that to the police?

Lord Stevenson of Coddenham: Yes.

Q93 Mr Burrowes: So the answer is you have not come across in your vetting procedures and your considerations any instances which give rise to any criminality?

Lord Stevenson of Coddenham: I would rather not be drawn. We are getting into very hypothetical territory.

Q94 Grant Shapps: It has become clear actually, in an hour and a quarter of questioning, that we have really got to the bottom of this, with Lord Hurd's answer. If one of us had £1 million and we wanted a peerage, the advice really - not quite from the Appointments Commission but nearly - is that actually, you are better off giving that £1 million to a project which is official government policy like a city academy than you are giving it directly to the political party.

Lord Stevenson of Coddenham: Can I just say that is a misconstruction of what Douglas said. Douglas made it quite plain he was speaking personally and not for the Appointments Commission. That is way beyond the Appointments Commission's remit. I go back to what I said. On the area we are discussing today we have rather a narrow remit, which indeed the Chairman, by his rather careful questioning, I think pointed up rather elegantly earlier on, which is to vet that list that comes from Number 10 for propriety. Full stop. It begs the issue that Douglas talked about. What you are saying is absolutely not in the horizons of the Appointments Commission.

Q95 Grant Shapps: It is actually the natural conclusion of what you were saying though, is it not? If you give that £1 million via a project, there is a peerage quite possible or certainly favourably looked upon. Give the money to a political party - actually nowadays, even lend the money to a political party, it is likely to disadvantage you, if your objective is just to get a peerage.

Lord Stevenson of Coddenham: That is a speculation, an inferential argument, which is quite outwith the considerations of the Appointments Commission.

Q96 Grant Shapps: It chimes in with exactly what we have just been told though.

Lord Stevenson of Coddenham: No.

Lord Hurd of Westwell: It is a conclusion you are drawing. It is not clearly what I was even in a personal view saying.

Chairman: I think we can draw this to a conclusion at that point. Could I thank you very, very much for coming along. We are very interested in the work that you are doing. The police are quite keen that we should not see certain witnesses, but I can reassure you that they did not mind us seeing you. We have benefited greatly. If you would drop me a line about the resignation list, I would be very grateful indeed. Thank you very much.