2000s >> 2006 >> no-1221-may-2006

Greasy Pole: Honour rooted in dishonour


We have been here before. We were here when New Labour were gleefully exploiting the Tories’ embarrassment over episodes of sleaze like Neil Hamilton and his cash for questions, while Tony Blair was encouraging the voters to believe that everything would be better, more open and honest, when he was at the head of the government. The party rosettes and the election manifestos had hardly been pushed down into the waste bins when that particular deception was exposed by the Bernie Ecclestone affair. Since then there has been a steady trickle of similarly discomforting events. And now there is the engulfing flood of revelations of “honours” being awarded in exchange for donations and loans to the party or to finance some of Blair’s desperate sticking plaster reforms of hospitals, schools… It is serious enough to involve the police, with one person arrested.


This raises the question of why there have been no prosecutions for something which has been illegal since 1925. It was Lloyd George who, as might be expected, was most infamously involved in what he described to a Tory MP as “…the cleanest way of raising money for a political party. The worst is that you cannot defend it in public”. In line with this he defended and promoted it in private, by appointing an agent, Maundy Gregory, to arrange the sale of honours – for, of course, a suitable commission. Gregory operated from a dauntingly expensive office in the heart of Whitehall, complete with uniformed flunkey. His price list varied from £80,000 to £120,000 for a viscountcy to £10,000 to £15,000 for a knighthood. Less affluent clients were also looked after; for them Lloyd George invented the OBE, which cost about £100. The Labour MP Victor Grayson, perhaps in an effort to revive a flagging political career, denounced the sale of honours through the work of “a monocled dandy with offices in Whitehall”. Soon afterwards he was mysteriously beaten up and then disappeared in suspicious circumstances, leading to the assumption that he had been murdered. Apart from such regrettable lapses Lloyd George and Gregory ran a civilised and profitable business, quite unthreatened by the fact that Lloyd George had sneered at the Lords as “…five hundred men, ordinary men chosen accidentally from among the unemployed”.



So blatant was the racket, from which Lloyd George made about £1.5million (about £150 million today) and Gregory about a fifth of that amount, that in 1925 it was deemed necessary to pass the Honours (Prevention of Abuses) Act, which should have landed a whole clutch of politicians, Tory as well as Labour, in trouble. In fact the only person to have been prosecuted was Gregory himself, who in 1933 was sent to prison for two months. After this “punishment” he retired comfortably to France on a generous pension as the price of his silence. The Tory MP who brokered that deal was awarded with a knighthood by the Labour Prime Minister Ramsay MacDonald, who whinged that the Tory Leader Baldwin had involved him “…in a scandal by forcing me to give an honour because a man has paid £30,000 to get Tory headquarters and some Tories out of a mess”. Was this, we may wonder, the same Ramsay MacDonald who had once described himself as a socialist?


And that was not the end of the affair, because since Gregory went about his odious business the sale of honours, under many guises, has continued to thrive. The Wilson government created Lords Sainsbury and Hamlyn, both of them contributors to party finances. Notoriously, the owner of the company which manufactured the Gannex raincoat so beloved by Wilson was ennobled as Lord Kagan; he was later jailed for corruption. Then there was Sir Eric Miller, who avoided further attentions from the Fraud Squad by committing suicide. That many of the peerages arranged by the Wilson government were rewards for donations to Labour Party funds was confirmed by Joe Haines, who was a kind of predecessor to Alastair Campbell in Wilson’s Downing Street. Although there is evidence that Wilson was not entirely happy about his awards, feeling that he was under pressure from party fund raisers, his retirement nominations (the infamous “lavender list”) was full of party donors and cronies. Haines refused to be included in it because he “…did not wish to appear in the kind of list which had Joe Kagan and Eric Miller and others whom I regarded as undeserving”.




Among all these double dealings Ted Heath was something of an aberration. Although he reversed Wilson’s decision to stop giving out political honours he was so sparing in his awards that he thought he had “…caused some grumbling among party members”. During his three and three quarters years in office he nominated 34 new life peers, in contrast to the following five years of Labour government under Wilson and Callaghan when 144 “suitable” candidates were put up. The payback for what Heath called “grumbling” came when he was confronted with Thatcher in the 1975 leadership contest. A number of backbenchers seemed likely to have taken revenge for their disappointment at being overlooked for a comfortable, unchallenged seat in the Lords which they saw as the just reward for their long abasement to the needs of the party.


With the advent of Thatcher things in the Tory party got back to what might be called normal. The Iron Lady established a reputation second only to Lloyd George’s for systematically using the honours system to raise money for the party or to reward or cajole restless backbenchers. Between 1979 and 1985 eleven industrialists were made peers after donating a total of £1.9 million to party finances; among them were Victor Matthews who gave £210,000, shipping magnate William Cayzer who gave £410,531 and Frank Taylor of the building firm Taylor Woodrow who donated £367,510.Then there were the knighthoods for the likes of Keith Showering (£424,000) and Nigel Broakes (£210,000). It was all summed up by the former MP, Chief Whip and Foreign Secretary Francis Pym who, undeterred by the fact that he himself had been ennobled as Lord Pym, told the Neill Committee on Standards in Public Life that “…a person had to put money where their mouth is to be considered for an honour”.




But all of that was supposed to have ended when New Labour arrived in Downing Street with their pledge to replace sleaze with transparency (politician’s jargon for motivated obscurity) and reward on merit (to be assessed on the size of a donation). In some cases big money has been given to support the new city academies, which are supposed to be an improvement on schools which were “failing” because their pupils were performing as might be expected from the area they live in, the depth of their family poverty and the bleakness of their life horizons. The latter-day Maundy Gregory with the job of organising these donations was Des Smith, a head teacher who was also a schools adviser to the government. Smith was persuaded to tell an under cover reporter from the Sunday Times that someone could expect to get one of a range of honours depending on how much money they put into the academies, from an OBE for one academy to a knighthood for two and a peerage – a “certainty” – for five. As a result of his venture into that particular branch of New Labour transparency Mr. Smith has been the subject of close interest from the police.


But in a sense donations to the academies are actually to the Labour Party, since they are designed to boost the party’s chances at the next election by financing one of Blair’s pet projects. Rather more straightforward were the loans from individuals, which the party has defended on the grounds that the money was lent at “commercial” rates – which raises the question of why they did not simply approach their bank instead of people who had rather a lot to gain through lending the money. For example there is Ron Aldridge, chairman of the company Capita which paid him £501,000 in 2004. He also has shares in the company worth some £60 million. Capita has contracts to supply “support services” to the Criminal Records Bureau (which was not among their finest achievements); it runs call centres for the BBC and the NHS and it collects the London Congestion Charge. Aldridge has lent the party £1 million; he got an OBE in 1994. Another lender is Barry Townsley, chairman of a stock broking firm who was barred from the Stock Exchange trading floor in the 1980s after a scandal involving some share deals. He has lent the party £1 million. Townsley was recommended for a peerage by Tony Blair but he refused the offer, saying it was not worth the negative publicity.




It is clearly misleading to refer to the baubles and titles dished out to venal business people and party hangers-on as honours. There is nothing honourable about them, except that they conform to the morality of capitalism. This is a society based on, and ruled by, the principle that sale and profit is a celebration while redundancy and loss is a tragedy. Yet the mouthpieces of capitalism, when it suits them, tell us that there are rewards for a finer morality where human service counts above the crudities of the balance sheet. It is ironically appropriate that even capitalism’s “honours” are for sale. Yes we have been here before and will be here again.


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