New Tory sleaze row as donors who pay £3m get seats in House of Lords

The Conservative Party has been accused of abusing the honours system by systematically offering seats in the House of Lords to a select group of multimillionaire donors who pay more than £3 million to the party.

Jonathan Calvert, George Arbuthnott, Tom Calver 

An investigation by The Sunday Times and Open Democracy reveals that wealthy benefactors appear to be guaranteed a peerage if they take on the temporary role as the party treasurer and increase their own donations beyond £3 million. In the past two decades, all 16 of the party’s main treasurers — apart from the most recent, who stood down two months ago having donated £3.8 million — have been offered a seat in the Lords.

Among them was Peter Cruddas, a billionaire whose peerage was pushed through by Boris Johnson against the recommendation of the Lords appointments commission. One of the commission’s members has broken the panel’s silence over the process, saying the prime minister’s decision to “override what we did … left a bad taste in my mouth”.

The role of Conservative treasurer has become the most ennobled job in Britain — ahead of holders of the great offices of state, leaders of the country’s institutions and charitable organisations and even former prime ministers.

As well as Cruddas they include the City millionaires Lord Spencer, Lord Fraser, Lord Lupton and Lord Farmer, who were ennobled in the past seven years. The mining mogul Sir Mick Davis turned down the offer of a peerage.

Farmer said it had become “a tradition” for Conservative prime ministers to hand out a peerage to the holder of the party’s top fundraising role. The former vice-chairman of the party Lord Brownlow was also given a peerage in 2019 shortly after his donations to the party topped the £3 million mark.

The alleged use of seats in the Lords as an arm of party fundraising is particularly controversial because — unlike other honours, such as knighthoods — peers fulfil an important role in the legislative process as a check and balance for new laws.

There is widespread concern in the Conservative Party about the way successive prime ministers have abused their control over appointments to the Lords by rewarding benefactors. Six former Tory ministers expressed deep unease about the practice.

One said it was a “scandal in plain sight” — widely known and accepted in the party. A former party chairman said: “The truth is the entire political establishment knows this happens and they do nothing about it … The most telling line is, once you pay your £3 million, you get your peerage.”

The party never publicly acknowledges the practice. One former minister said there was “a law of omerta” forbidding any discussion of the link between donations and seats.

A Conservative spokesman said: “We do not believe that successful businesspeople and philanthropists who contribute to political causes and parties should be disqualified from sitting in the legislature.”

Lord Fowler, a Conservative former cabinet minister and later Lord Speaker, said: “Most big contributors want something: it may be influence over the direction the party is taking; it may be a particular policy; it may be an honour. All have clear dangers for a political party.”

Many other Conservative donors have also been ennobled alongside the party’s treasurers: 22 of the party’s main financial backers have been given peerages since 2010. This includes nine donor treasurers. Together they have given £54 million to the party.

Only two Labour Party donors and five Liberal Democrat financial backers have been ennobled over the same period. The parliamentary watchdog has blocked six further peerage nominations for Conservative donors on the grounds of impropriety over those 11 years.

A Tory insider said his party was dangling peerages before donors like “carrots” and everyone in the party was aware of the “cynical operation”. He cited the case of one donor he knew who had been enticed into giving £1 million to the party because he had been persuaded by a treasurer that the donation could lead to an ennoblement.

There is no suggestion any of the donors named in this investigation requested or were promised a peerage or were directed or offered to pay any particular sum to secure an honour. However, numerous Conservative sources have been highly critical of the way the party appears to be using peerages to reward large donors. They say it is morally corrupt and wrong.

Many of the ennobled donors have made minimal spoken contributions to the House, despite the party justifying their peerages on the basis of their business or financial experience. The donors often stop or severely curtail their handouts once they are accepted into the House.

Lord Jay, a former chairman of the House of Lords appointments commission, said donations were increasingly becoming a factor in prime ministers’ selection of new peers.

“It would be better if people were appointed on the basis of the contribution they will make as lords, rather than on other factors such as how much money they’re giving to the party,” he said.

Clamour is growing in Westminster to reduce the size of the House of Lords. Successive Conservative prime ministers have used peerages to reward their friends and cronies, and there are now more than 800 peers, which makes the Lords the world’s second-biggest political chamber behind the annual Chinese Congress.

Since Johnson became prime minister 96 peers have been created.

Cruddas and Brownlow did not respond to requests for comment. Lupton declined to comment. Lawyers for Spencer denied he had taken the role as party treasurer and made donations to secure a peerage. Farmer said he donated to the party because he wanted a Conservative government.

Anneliese Dodds, the Labour Party chairwoman, said last night: “The stench of sleaze emanating from Boris Johnson’s government grows by the day, with even a former Conservative prime minister calling his administration ‘politically corrupt’.

“Labour would stamp out sleaze, with a tougher system to restore the public’s faith in our democracy and politics.”

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