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Handing knighthoods and other honours to financial backers of major political parties risks bringing the system into “disrepute” because of the suspicion of corruption, according to the standards watchdog.

Newspaper Article

- By Christopher Hope, The Telegraph, UK

Sir Christopher Kelly, the chairman of the Committee on Standards in Public Life, was speaking after four leading Conservative donors who had collectively given the party nearly £1million were given awards in the New Year honours list.

“Paul Ruddock, a hedge fund manager, and Doug Ellis, a package holiday millionaire were knighted, while James Lupton, an investment banker, and James Wates, a construction firm tycoon, were awarded CBEs in Saturday’s list.”

Paul Ruddock, a hedge fund manager, and Doug Ellis, a package holiday millionaire were knighted, while James Lupton, an investment banker, and James Wates, a construction firm tycoon, were awarded CBEs in Saturday’s list. However Labour criticised the awards, suggesting the Government was using the system to reward individuals who had been generous to the Conservative party.

Sir Christopher said that the claims showed why rules on party funding needed to be changed to prevent any suspicion that rich individuals can buy influence. The three main parties are considering proposals he submitted in November.
He told The Daily Telegraph: “For as long as you can make political donations, when there is a coincidence between honours and donors you get this sort of story.

“It implies corruption even when there isn’t any. It is unsatisfactory. It is bad all round. They risk bringing it [the honours system] into disrepute.”

Sir Christopher said that the claims showed why rules on party funding needed to be changed to stop rich individuals influencing parties. The three main parties are considering proposals he submitted in November.

He continued: “This is why we need to reform the system because donating to political parties should neither bring an honour nor be a bar to receiving an honour.

“For as long as we have a system where the parties depend on very large donors, you will continue to get stories like this which are very bad for confidence in the political system and unfair to donors who do give for altruistic notions.”

The honours system was not tainted but he said “democracy and the integrity of the system that is damaged. It is also unfair to those who do give altruistically to have their names paraded in this way.”

Sir Christopher’s concerns were echoed by his predecessor Sir Alistair Graham who said that the appearance of a reward for political donors devalued and undermined the integrity of the honours system. He said: “I do think it slightly devalues the system if those people who have given public service over many years get honours quite rightly for the work they have done for society and for local communities, then see other people can buy them for a sort of one off large donation. It does undermine the integrity of the whole system.”

Sir Alistair, who was standards watchdog from 2003 to 2007, said that there are questions that need to be asked about how the vetting system works by civil servants in Whitehall of nominees for honours. He said: “It does throw up a question-mark about how effective the system is in ensuring that people are getting honours based on criteria related to their public service rather than their political donations.”

Chief among Sir Christopher’s recommendations, which were submitted to the parties in November, is a £10,000 cap for party donations, apart from individual union membership affiliate fees. The likely reduction in funding that this would result in would be made up by £23million a year of state funding for political parties, which works out at a contribution of 50p per elector.

Publishing his recommendations in November, Sir Christopher warned that the current way of funding political parties, using large donations from a small number of people, was “open to corruption” and “scandal” in the future.

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