Summary
This report into questions of propriety in the awarding
of honours and peerages was much delayed by a lengthy police investigation.
We paused our inquiry in March 2006 because we did not wish to
risk prejudicing any criminal trial. Once it became apparent,
however, that there would be no such trial, we have hastened to
complete our inquiry and publish our findings as quickly as possible.
We have been clear throughout our inquiry that our
business was not to re-run the police inquiry or to judge the
performance of the police. Our aim has been to examine the systems
designed to ensure propriety and recommend improvements to those
systems.
The public impression of covert patronage created
by the 'cash for honours' affair is at odds with a system that
is, on the face of it, more transparent than ever before, thanks
to recent measures to improve the regulation of party funding
and of appointments to the House of Lords.
More has been done since. Central to the affair was
the regrettable loophole in the law which did not require parties
to declare loans that were received on commercial terms, without
adequately defining what those terms were. The passage of the
Electoral Administration Act 2006 has closed this loophole. However,
the spirit of the law on loan funding was very clear. If all parties
had acted in that spirit, many of the subsequent difficulties
could have been avoided.
A package of reforms is needed. Proposals relating
to party funding are already being considered by the Government,
hopefully in conjunction with other parties. The Electoral Commission's
role is to be refocused on enforcement of standards. Our proposals
complete the package.
The Honours (Prevention of Abuses) Act was severely
tested by the police investigation. In our view, its scope remains
appropriate, even if the behaviour it criminalises is inherently
difficult to prove to the necessary standard. In the longer term,
we hope that these offences can be incorporated into a more general
law on public sector corruption, a modern version of which is
long overdue.
However, while the ability successfully to prosecute
offences is essential, an effective system would act to prevent
corrupt behaviour in the first place. The core of this matter
is party leaders' powers of patronage. Political patronage has
been effectively removed from the honours system; its scope should
also be greatly reduced in the awarding of peerages. This would,
at a stroke, remove much of the room for abuse in the alleged
link between donations and peerages.
Our main proposal is for an immediate House of Lords
reform measure, clearly defined in scale and scope. Its primary
purpose would be to put the independent House of Lords Appointments
Commission onto a statutory footing, and empower it to take decisions
on the size, balance and composition of the House against agreed
and explicit criteria. A mechanism is also needed for peers to
resign from the House—or, in some circumstances, to be compelled
to leave.
Although these proposals ought to be, and some need
to be, set out in legislation, the Government should not wait
where it does not have to. The Government could implement immediately
our proposal for new peers to be chosen by the Appointments Commission
rather than by political parties. Under our proposals, the Commission
would choose candidates from "long lists" provided and
published by the parties, with the qualifications of nominees
made public. The methods used by the parties to choose candidates
to put on those long lists would be for the parties themselves
to decide, but we suggest that more transparent arrangements will
be more likely to command public confidence.
Lastly, the report argues that the link between the
honours system and the award of seats in the legislature—already
significantly weakened—should be broken for good. Honours
and titles should be for past service; a seat in Parliament for
potential future service.
Our recommendations build on principles to which
the major parties have already signed up. We hope that the experience
of the last two years will provide the impetus to make them happen,
and with a proper urgency.
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