22 Feb 2022

Cash for Honours

Image: Sir Brooke Boothby, 6th Baronet, by Joseph Wright of Derby, 1781

The monarch is known as the ‘fount of honour’ and the creation of hereditary titles is a royal prerogative. Historically, the peerage was formed of a tightly knit group of powerful nobles, whose titles, lands and rights had been bestowed upon them by the monarch in exchange for an oath of loyalty. In time, the ranks of the aristocracy were swollen by lesser branches of old families, and from the gentry and knightly classes.

 It was the first Stuart monarch, James I, who made the connection between title and payment explicit. He instituted the hereditary order of baronets in England by letters patent on 22 May 1611. The primary reason for raising funds by selling baronetcies was for financing the settlement of Ireland. He offered the dignity to 200 gentlemen of good birth, with a clear estate of £1,000 a year, on condition that each should pay into the king's exchequer in three equal instalments a sum equivalent to three years' pay to thirty soldiers at 8d per day per man.

Sir Thomas Gerard (1560–1621), for example, was created Baronet in 1611. He had paid the expected £1,000 for the dignity, but it was returned to him in consideration of the sufferings of his father in the cause of Mary Queen of Scots. In the words of James I: ‘I am particularly bound to love your blood on account of the persecution you have borne for me’. As well as a baronetcy, the king also gave his loyal subject an interest in the tobacco pipe monopoly. 

Subsequent monarchs also continued to sell baronetcies, and it was considered an acceptable way of raising revenue. It was not until the 20th century and the scandal surrounding Lloyd George’s brazen exploitation of the honours system that this practice became newsworthy.

The Liberal politician David Lloyd George was well known for his searing criticisms of the House of Lords and its members. He famously remarked that “A fully-equipped duke costs as much to keep up as two dreadnoughts. They are just as great a terror and they last longer.” He became prime minister in 1916, when he headed a coalition that relied heavily on the support of the Conservative Party.

The Liberal Party was in need of money, and Lloyd George found the perfect solution. In six short years, a staggering 1,500 knighthoods were created, and 91 peerage titles were bestowed, twice the figure for the previous 20 years. Lloyd George was unapologetic about the practice of selling titles: a published tariff listed 10,000 for a knighthood, 30,000 for a baronetcy and 50,000 plus for a peerage.

The Order of the British Empire (OBE) was instituted and was targeted at ambitious individuals who could not afford a full title. The honour was awarded to 25,000 people over a four-year period, and became so devalued that it was known as the ‘Order of the Bad Egg’.

Lloyd George’s masterstroke was to award an array of peerage titles to Fleet Street’s press barons – unusually, these were freely bestowed and no cash exchanged hands. In this way it was ensured that the press, with its self-interested and newly ennobled owners, would not hold the Government to account.

Many of the new title-holders were industrialists and self-made businessmen, moving the peerage away from old money and the landowning classes. The cash grab mentality inevitably meant that, since money was the main criterion for the award of titles and honours, an egregious array of criminals, tax evaders and fraudsters were also able to buy status and respectability. King George V was appalled, remarking that the award of an honour to John Robinson, a convicted fraudster, “must be regarded as little less than an insult to the Crown and to the House of Lords.” Even Fleet Street turned on its erstwhile benefactor.

Lloyd George was forced to agree to a parliamentary debate on the cash for honours scandal on 17 July 1922. He somewhat disingenuously described the selling of honours as a “discreditable system. It ought never to have existed. If it does exist, it ought to be terminated”. In time-honoured fashion, he pleaded the financial exigencies of the Great War.

A Royal Commission was announced, which published its report in November 1922. As a result the Political Honours Scrutiny Committee was established to vet potential candidates for honours, and the Honours (Preventions of Abuses) Act 1925 made it an offence to accept a monetary award in exchange for an honour.

Yet scandals continue to beset the British Honours system and it is widely accepted that ‘donations’ to a political party may, entirely coincidentally of course, be accompanied down the line by the granting of a title or honour. As recent events have highlighted, these benefits are also granted to non-British citizens with deep pockets.

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