News 03rd Apr 2024

The current status quo of the House of Lords leaves too many corruption risks unchecked.

Rose Whiffen

Research Officer

Rose is a Research Officer specialising in political corruption. Her work covers issues of money in politics, lobbying, the revolving door and open governance. She was a key researcher and writer of Transparency International UK's 'House of Cards' report which explored access and influence in UK housing policy and contributed to other reports, such as 'Track and Trace', which explored Covid procurement. She's previously held roles at Democracy Club and Spotlight on Corruption, and completed an MA in Corruption and Governance from the University of Sussex.

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For every one and a half days that Liz Truss was in power, she created a peer – 32 in total.[1] Whilst her premiership didn’t last very long, these new legislators will have a seat in the House of Lords for life.

How is this possible? It is because these appointments are made through a system of unfettered Prime Ministerial patronage. This allows government leaders to appoint as many peers to the second chamber as they wish during their tenure and when they leave their post through resignation honours. This at first glance seems surprising, surely there are some restrictions on who takes a seat in one of the oldest law-making bodies in the world?

Unfortunately, not. There are only minimal checks on political appointments. Every Prime Minister must submit the names of the nominees for peerages to a watchdog, the House of Lords Appointments Commission (HOLAC), so it can vet them for propriety. The Commission contacts relevant bodies to see if these individuals have had any issues with the law or tax.[2] But this presents a low bar of quality control.  Between 2018 and 2022 political parties submitted ten nominations which HOLAC advised did not meet this threshold. However, in one well known case, the Prime Minister decided to ignore this advice and appoint the nominee to be a peer anyway.  This was perfectly within the rules and demonstrates how this watchdog, like too many in Westminster, lacks teeth.

HOLAC does have the power, however, to nominate candidates to the House of Lords.  These candidates are subject to much more scrutiny, also being vetted on their ‘suitability’. This is judged on their ability to contribute to the work of the House, be independent, and uphold standards in public life. Whilst this reform was intended to balance the appointments system, by introducing more cross benchers and moving patronage away from the sole discretion of the Prime Minister, there have not been very many HOLAC appointments in recent times - only about two a year.

The combination of unfettered patronage for political nominees and only a small intake of candidates being subject to a more stringent vetting process via HOLAC, has some inevitable and problematic consequences.

Analysis from our most recent paper, “Reducing corruption risks in a reformed House of Lords” found that there are 50 sitting peers who have never contributed more than five times to proceedings in the House of Lords. Only 6 per cent (3 peers out of 50) of these absentee Lords are those nominated by HOLAC, whereas party leaders nominated 74 per cent (37 peers out of 50). This is not to say that there aren’t peers who are political appointments and who don’t contribute extensively and whole heartedly to the work of the second chamber, there are. However, the legitimacy of their work, often staying late in the night to work on bills, doesn’t quite grab the headlines as much as the few who turn up for their maiden speech never to be heard from again.

Likewise, the legitimacy of the House is undermined by the extensive number of peers who are also political donors. Our research finds that there are over one in five peers appointed in the last ten years who have also donated to a political party, 68 out of 284. What’s more, the sheer number of how much they have donated is striking – over £58 million. That cash is almost certainly exchanged for peerages, despite this being a criminal offence for over a century, is a stain on Parliament’s reputation.

So, what is to be done?

It seems inevitable that stories of donors becoming peers will come around every year, each time met with an eye roll from the public. Crucially though, this collectively adds to a picture of declining trust in UK politics, with recent polling showing that 66 per cent of respondents thought politics is becoming more corrupt. Parliament must act now to shore up confidence in the democratic system by removing the unlimited power of patronage from the Prime Minister.  

Parliament must also confront the context of this issue - that there is currently no limit on how much individuals or companies can donate to political parties leading to many donating over millions of pounds.  If the size of donations were restricted, as is the case in most of other Western democracies, this would reduce the incentive to reward benefactors with peerages.  Reducing how much parties and their candidates can spend at election time – which is far too much currently – would also help calm what has become a renewed arms race between the major parties, forcing them to take riskier fundraising strategies.

Additionally, the powers of HOLAC could be bolstered, for example by allowing it to check political nominations for suitability as well as propriety. The Commission should also be given the power to veto nominations, rather than just stating their disapproval with a nomination, as is currently the case.

These reforms are not radical or revolutionary -  they are simple, practical steps that a government could make to boost the legitimacy of the second chamber without drastically rewriting the whole system. Too frequently, scandal is the catalyst for change in our politics, to the detriment of trust in our democracy.  Liz Truss’s resignation honours should be a wake-up call and the last of their kind.