Peerages: a job, not an honour
Some of us expect the Labour party and a Labour government, even a New Labour one, to behave better and more honestly than the other parties, so the fresh revelations about the sale of peerages in exchange for very large donations to the party are another blow to our confidence in the system under its present management; and the further revelation that some of the donations have avoided any obligation to be publicly declared and transparent by being dressed up as ‘loans’, without even the knowledge of the Labour Party’s elected Treasurer, can only make matters worse.
It’s worth, though, making a few relevant points, not in mitigation but of context with a view to future remedy.
First, the issue of state honours has got hopelessly confused with the totally different issue of appointments to the second chamber of the legislature. The first implies recognition of public services rendered and, in the sunlit uplands of the honours system, involves the conferring of a handle to the honorand’s name, often much coveted: Lord, Lady, Baron, Baroness, Sir, Dame. The second process need not be related to past services but instead implies suitability by experience and skills for service in the pretty humdrum work of scrutinising and reviewing legislation as an unelected member of our parliament. It’s become urgently necessary to disentangle the two quite different procedures. Once membership of the second chamber is recognised as a demanding and mainly routine and unglamorous job, even (or especially) the richest wannabe politicians may be more reluctant to offer to pay big money to get it.
Secondly, and as a corollary of the first point, it’s ridiculous to go on giving what are essentially bogus peerages to everyone appointed to the second chamber, and calling them Lord or Lady. 
The great majority of the hereditary peers have by now been removed, mostly kicking and screaming, from the chamber, and the rest are due to follow soon. There’s really no more reason to make every remaining or new member of this workaday institution a Lord or a Lady than there is to make every elected member of the House of Commons a Prince or a Princess. Still less need we dress up the appointed members of what is in practice the lower house in pantomime costumes on state occasions or put them through embarrassing fake-mediaeval rituals on first appointment.
Thirdly, this is no longer going to be a ‘House of Lords’ when in the near future there won’t be a single proper Lord left in it. In most serious western democracies the second chamber is called the Senate. Everyone knows what that means and there’s no possible reason to go on calling our second chamber something that’s not only different, but actively misleading too.
Fourthly, the spectacle of a wholly appointed chamber of the legislature of a modern western democracy has become an embarrassment too far. Of comparable democracies only Canada sheepishly maintains an entirely elected appointed second chamber, and as a result it is generally despised by sensible Canadians. ‘House of Lords’ reform here is long overdue. A clear majority of members of the elected chamber favour a second chamber which is either wholly elected or else which has a substantial majority of elected members, preferably elected on a system different from that of the House of Commons and which will ensure that no one party has an overall majority in the second chamber. Only the obstinacy of the prime minister continues to obstruct this manifestly overdue reform. He fears that a mainly elected second chamber will challenge the primacy of the House of Commons. That is rubbish. The primacy of the Commons is assured by its function of choosing and sustaining or dismissing governments, by its almost unlimited (if largely notional) powers, and by the strictly limited powers and functions of the Other Place, none of which needs to change with ‘Lords’ reform.
And, finally, we must resist the siren voices of self-interested politicians arguing that if the political parties can no longer fund themselves by selling peerages, they must be given large slabs of the taxpayers’ money so that they may continue to keep our democratic system running. The financial crises of the main parties has nothing to do with the difficulty of selling patronage: it reflects the general disillusionment of ordinary men and women with the way our democracy has been hijacked by an over-mighty executive which has seized control of the parliament it is supposed to serve and answer to, not to manipulate and bully into doing its bidding. It reflects resentment of the power-grabbing centralism of Westminster politicians who preach empowerment at local neighbourhood level while enthusiastically legislating to determine whether an unemployed former miner in Durham should be allowed to have a cigarette in the local pub or working men’s club. If a political party can’t arouse enough enthusiasm among its supporters to generate the financial wherewithal to enable it to function, it should be allowed to go to the wall. The draining away of willingness on the part of ordinary people, including through companies and trade unions and other bodies, to stump up for the good of the party should concentrate political leaders’ minds wonderfully on the reasons for their failure, and on the need for radical remedies. It should be no business of the taxpayer to rescue them from that salutary discipline.
If these simple and sensible recommendations were to be adopted, the problem of cash for peerages would vanish almost overnight. Some hope!
Postscript: To pre-empt some predictable comments, I am trying to resist the temptation to get into the separate question of reform of the honours system, also long overdue. The only relevant aspect of that to this discussion is the question of new peerages. If the grant of a peerage is decoupled from the appointment of a member of the second chamber, as I recommend earlier, then there would be no need or justification for making new peers. To avoid a breach of faith with existing ‘life peers’, they would, I suppose, have to be allowed to keep their titles until they die. Lower down the honours system I would strongly favour abolishing all honours that entail a change of handle to the name, all honours in recognition of services for which the person concerned has been paid in the course of his or her principal career, and the hierarchical structure of the honours system which in practice relates mainly in effect to social class. But all that is really for another day.
Brian
Of comparable democracies only Canada sheepishly maintains an entirely elected second chamber,
….I think you meant "appointed", not "elected".
More substantially, doesn’t the House of Lords act not just as the Senate but also as, in effect, the Supreme Court? Do you think those roles should be split or do you think the second is appropriate to an elected body, too?
Brian replies: Many thanks for pointing out that stupid typo, which I have corrected.
Yes, I certainly support divesting the second chamber of the legislature of its function as the highest appeal court and setting up a wholly separate Supreme Court: in fact, legislation to put this into practice is already on the statute book and we should have a separate Supreme Court fairly soon, which will be a considerable advance (and will incidentally remove the cause of much misunderstanding). Of course under existing arrangements the House of Lords doesn’t sit as a complete chamber of all peers to determine cases in its judicial capacity: only the Law Lords do that, so the change won’t be as revolutionary as it might appear.)
But your question raises wider questions about the future of the present ex officio members of the House of Lords in a reformed second chamber — not just the Law Lords but also the bishops. I hope very much that they will simply disappear from the legislature, in which they ought to have no place. It’s fairly generally agreed that despite the Church of England’s status as the established church (a status that itself is hard to justify in this secular and multicultural time), there’s no justification for giving this privilege to just one of so many religions and denominations. Some have gone on from this to suggesting that instead of banishing the C of E bishops, religious representation should be broadened by co-opting representatives of all the major religions and denominations. This seems to me little short of crazy. The great majority of Britons are in practice (whatever they may say to pollsters) completely irreligious, indifferent to religion and non-participants in any religious activity except the occasional christening, wedding and funeral. Why a small minority of active believers should have special representation in our law-making institution is beyond me. Moreover, how would we decide which ‘religions’ or denominations should qualify for Senate seats? Mormons? Scientologists? Druids and Stonehenge celebrants? Witches? Flat Earthers? Creationists? How are any of these to be distinguished by constitutional law from Church of England free-thinkers who don’t actually believe in God or from Islamic fundamentalists who seek to impose Shari’a law on the whole country? The only defensible policy is to agree that the new reformed second chamber should be confined to a directly elected element (preferably 100 per cent, but anyway no less than 80 per cent) and possibly a smallish minority of members appointed by an independent statutory body on the basis of criteria laid down by statute and completely divorced from political parties and their leaders or ministers.
Some of the current life peers undoubtedly make a valuable contribution to debates and decisions from their experience as former senior civil servants, leaders of the armed forces, civil liberties lawyers, leaders of the voiluntary sector of civil society, even former cabinet ministers and other superannuated politicians. Even, in a few cases, bishops! But it’s hard to justify giving such sages a vote on legislation. Perhaps these worthies could constitute a kind of semi-formal third chamber for debate only, licensed to propose amendments to draft legislation and to make recommendations to the two legislative chambers, but not to vote on legislation as such. Experience of this might suggest that it should either eventually be allowed to wither away by natural wastage, or be kept alive by infusions of fresh blood. But let’s stop calling them Lords!
Dear Brian,
Not sharing your expectation that the Labour Party will behave more honestly than the other parties, I am nevertheless surprised by the revelation that the party’s treasurer knows nothing about these "loans" (will they, incidentally, ever be repaid?).
My wife is treasurer of our local Neighbourhood Association. If she were to hear on the grapevine that donations or loans had been made to the Association without her involvement, I think the first questions she would ask would be whose bank account are they in? And who signs the cheques?
When will John Humphrys or Jeremy Paxman get around to asking the same questions?
Yours ever,
Oliver Miles
Brian comments: I suspect that there’s some understandable confusion, or at any rate ignorance, about the respective roles of Jack Dromey, deputy general secretary of the Transport and General Workers’ Union, elected Party Treasurer (a part-time job) by the Labour Party Conference, and Peter Watt, who succeeded Matt Carter in November 2005 as the party’s full-time General Secretary and his full-time staff. That staff according to some reports include a finance officer who, with the General Secretary, has legal responsibility for the day-to-day financial affairs of the party, including preparing the party’s annual accounts for the auditors and the annual conference. Those accounts (as can be seen from the 2005 Annual Report to the conference) are signed by both Watt (in 2005 Carter) as General Secretary and Dromey as Treasurer. Dromey also delivers the oral report on the party finances and the accounts to the conference. But it seems he is not normally involved in signing cheques or checking daily or weekly accounts in the way that a full-time Treasurer or Finance Officer would do. Of course he should have been kept informed by Watt as the General Secretary (who is young and relatively inexperienced; he is a former nurse) of any significant new transactions such as these big loans, and his failure to do so is on the face of it inexcusable; but I suggest that the significant difference between their respective roles, one part-time and mainly involved in the detailed accounts at conference time, the other in day-to-day charge of the party’s affairs, helps to put the furore into perspective. Moreover we ought to await the results of the internal inquiry set up by Dromey, and expected on Tuesday 21 March, before we rush to judgement about the circumstances in which he was not informed about the loans. There may have been catches dropped at the time of the change of General Secretary last November, for example.
It might also be relevant that Dromey is reportedly a Gordon Brown man.
My guess is that Dromey, who has been Treasurer for two years now, is well informed about which account the loans will have been paid into, and who is authorised to sign cheques (although it’s more relevant to ask who has authority to raise loans, set conditions for them, and consult or inform the elected officers of the party about them, all of which Dromey would doubtless know — it’s the specific loans that he wasn’t told about, it seems).
Have you been reading Hayek recently?
Brian replies: Er — no, afraid not! Where should I start?
Brian: I’m afraid my comment was off-topic and somewhat mischievous: I substituted business/industry/economic activity for
"political party" in your article and wondered if you had been recently reading Hayek or some "Chicago economist". You sounded somewhat free-market to me!Most people, I presume, come to Hayek through reading The Road To Serfdom; an online, abridged version is available as a pdf. This book was certainly influential in developing the politics of one Margaret Hilda Roberts whilst she was a chemistry undergraduate at Oxford. I hope I haven’t raised your blood pressure too much!
Brian replies: Thanks again. I’m aware of Hayek and the Chicago school (Milton Friedman, his Nobel prize), monetarism, free market economics, etc. without ever having read a word of either FH or MF. But I have downloaded the Reader’s Digest condensed milk version of Serfdom (thanks for the reference!) and promise to try to read it before I die, whenever that might be. (No, I feel fine, despite the blood sugar reading, thanks.)
But although no economist, and no doubt under the influence of this chap, I do incline to believe that in the world of the production of most goods and services, most of the alternatives to the free market, or as close to the free market as it’s possible to get, are less efficient at responding to what people actually want and that a prime purpose of state intervention should be to make the free market as free and fair as possible — free by crushing monopolies and capitalist conspiracies to screw the consumer, fair by minimising inequalities of outcome and maximising availability of accurate information about the market, but not by preventing the market from functioning or trying to interpose political judgements and values between the evolution of demand and the market’s response to it. I don’t think any purpose is served by labelling that view as either left-wing or right-wing, and the fact is that almost all democractic governments in developed countries whether of the centre-left or the centre-right tend in practice to act on it, whatever they might say to disguise the fact. OTOH I don’t believe that it’s productive to try to impose free market practices on the health or education systems or other social services or defence (except to some extent over weapons procurement) or most of the rest of the ‘social’ sector. Perhaps a combination of Hayek and Readers Digest will persuade me that it should be applied across the board.
I might add that I’m influenced in these views by having spent several years living in command economies in several countries (including the Soviet Union, which you may be too young to remember) and by having seen at first hand the gross inefficiencies, the incredible waste, the perpetual shortages, the corruption and sleaze generated by the shortages and by political control of all economic decisions, the rank injustice and the inequalities that they produce. I have visited a sizeable city where it was impossible to buy an ordinary kitchen saucepan because the state planning authority had set an absurdly ambitious production target for the one state saucepan manufacturer, and expressed the target in terms of tons; so the manufacturer (fearing a long holiday in the Gulag if he failed to hit the target) turned out a few huge industrial or restaurant saucepans in order to hit the target more easily, but no domestic kitchen ones. The huge saucepans stayed on the factory shelves because no-one wanted them, and a sizeable black market in over-priced (because scarce) second-hand kitchen saucepans sprang up for those brave or desperate enough to risk buying outside the official state system. In my book, although probably not in Hayek’s, that has absolutely nothing to do with socialism and everything to do with lethal bone-headedness.
While the cash-for-ermine furore is good copy for print and broadcast journalists a little googling shows something more insidious perhaps? For instance, Capita announced that it had been appointed as DTI-preferred supplier for a contract worth £120 million over three years 20 Feb, 2006, the CEO of the company being Rod Aldridge.The same Rod Aldridge who now has been shown, according to information released by the Labour Party on 20 Feb, 2006, as a £1 million donor to the cause. Hmm.
Brian comments: Capita has of course had numerous lucrative government contracts, since before Labour came to power in 1997, scooping up many of the privatised or hived-off or out-sourced enterprises cast off by first the Tories and latterly by [New] Labour. Not all have been notable successes, either. Private Eye calls it Crapita.
The BBC are reporting, Capita boss quits over Blair loan:
The cash-for-ermine furore is having severe consequences for Labour Party finances, donating to the Labour Party in significant amounts will be seen to be buying either commercial or political favours and thus deter donations at a time when the party is desperate for cash. The Independent is reporting that Labour HQ is being sold.