The Liberal politician David Lloyd George had very distinct views on the House of Lords and its members; he once famously quipped 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."1 and characterised the House of Lords as "five hundred men chosen at random from the ranks of the unemployed"2. Of course these comments were inspired by the fact that, following the election of a Liberal government in 1906, the House of Lords had been cheerfully frustrating many of the cherished reforms of the Liberal Party, a dispute that reached its peak with the clash over the so-called People's budget of 1909.3
However as we shall see, such opinions did not prevent Lloyd George from later profiting from the sale of such titles. (Any more than they prevented him from eventually accepting his own hereditary peerage as the Earl Lloyd George of Dwyfor.)
Lloyd George knows my father, father knows Lloyd George4
In 1916 David Lloyd George replaced Herbert Asquith as Prime Minister at the head of a coalition government that relied heavily on the support of the Conservative Party. This resulted in a split in the Liberal Party between the Asquith Liberals or Squiffites and the Lloyd George or Coalition Liberals. Since the Asquith Liberals controlled the party and its funds, this left the Coalition Liberals in need of money, and the easiest ways of raising money for party funds was to sell honours.
Now there was nothing new about the practice of selling honours, or indeed of using the funds as a means of party financing. This had been going on for some time, but by tradition such deals were made with a nod and a wink over a glass of port in the Carlton or Reform clubs. What distinguished the sale of honours under Lloyd George was the sheer scale of the operation and the brazen manner in which honours were offered for sale. Ostensibly handled by Lloyd George's Chief Whip Freddy Guest and his press agent William Sutherland, the operation was actually run by a former actor and theatrical impressario by the name of Maundy Gregory. Gregory had his own offices in Parliament Square and openly touted the sale of honours on official government letters that were sent out boasting of the "exceptional opportunity" on offer. There was even a published tariff with a knighthood being available for £10,000, a baronetcy for £30,000, with a peerage title costing upwards of £50,000.
Between December 1916 and July 1922 an astonishing number of 1,500 knighthoods were awarded and Lloyd George similarly bestowed a total of 91 peerage titles within the same period, twice as many as had been created in the previous twenty years. Indeed Gregory, noting that there were men with cash to spare who couldn't quite afford a knighthood, specifically invented the Order of the British Empire to fill the gap in the market. As a result 25,000 people were 'given' the OBE over a period of four years and the 'honour' became so rapidly devalued that it was commonly known as the Order of the Bad Egg.
However not everyone was required to pay, as around fifty or so honours were thrown in the direction of Fleet Street, All the leading newspaper owners such as William Astor (Viscount Astor), Maxwell Aitken (Baron Beaverbrook) Alfred Harmsworth the (Viscount Northcliffe) and his brother Harold Sidney Harmsworth (Viscount Rothermere) found themselves raised to the peerage, thus ensuring that the press were inclined to turn a blind eye to the whole affair.
It might well be argued that the real issue with Lloyd George's grand sale of honours was that there was no quality control exercised over the applicants, as the only criterion that appeared to matter was the ability to pay. Indeed Gregory seems to have specifically targeted wealthy but unscrupulous individuals who wished to buy themselves a little respectability. Thus Richard Williamson, a Glasgow bookmaker with a criminal record acquired a CBE, and Rowland Hodge became a baronet in 1921 despite his prior conviction for hoarding food in 1918. Many people warned Lloyd George that he was going to far, as the only people receiving honours appeared to be either businessmen or newspapermen. George V was also known to be unhappy about the whole thing but the only way he could express his displeasure was to delay the granting of the occasional honour to the very worst of the bunch.
The crunch came with the announcement of the July 1922 honours list. This included the award of honours to; John Drughorn (convicted in 1915 for trading with the enemy), William Vestey (convicted of tax evasion), and Joseph Robinson (a South African who had only recently been convicted of a £500,000 share fraud.) This was too much for king George who complained that "the Robinson case must be regarded as little less than an insult to Crown and to the House of Lords". It was also too much for Fleet Street who despite being the prior recipients of Lloyd George's largesse now turned against him. It didn't help that the Dukes of Sunderland and Northumberland (both the targets of Lloyd George's earlier attacks) had got hold of one of Gregory's letters and cheerfully read out the contents in the upper House.
Lloyd George was forced to concede a parliamentary debate on the 17th July 1922. Speaking in the House of Commons he described the selling of honours as a "discreditable system. It ought never to have existed. If it does exist, it ought to be terminated"; and explained that it was the war that was responsible for the high volume of honours awarded under his administration. Althogh he continued to insist (privately at least) that "the sale of honours is the cleanest way of raising money for a political party"5, the scale of opposition to the practice in Parliament was such that he was forced to promise reform.
In the time honoured fashion Lloyd George appointed a Royal Commission to look into the whole matter, but rather craftily ensured that the terms of reference restricted the commission to only making recommendations as to future practice and thus excluded it from examining past conduct.6 In this manner Lloyd George managed to avoid any responsibility for the whole scandal, although this did little to arrest the declining fortunes of his government and he resigned in October 1922 and never saw office again.
The Royal Commission published its report in November 1922 and the result was the establishment of the Political Honours Scrutiny Committee, to oversee those names put forward by the Prime Minister as worthy of receiving an honour, and the Honours (Preventions of Abuses) Act 1925 which made it an offence to accept a monetary reward in return for granting an honour.7
None of the above has necesarily removed all trace of scandal from the British Honours system. Many have since commented on the number of occasions on which the gift of a large amount of money to a political party has been followed by the subsequent granting of an honour to the donee. This is of course entirely co-incidental and in no way indicates that deals have been done with a nod and a wink over a glass of Chablis at the Groucho Club.
1 The joke here being that the government was faced with the £3 million cost of building new Dreadnought battleships to keep ahead of German naval expansion.
2 As opposed to the House of Commons which is of course, 'six hundred men chosen at random from the ranks of the unemployable'.
3 Lloyd George launched a scathing attack on the peerage and inherited wealth in his famous Limehouse speech of 31st July 1909. Ably supported by a certain Winston Churchill (then in his radical phase) he escalated the dispute which directly led to the Parliament Act 1911 and the effective demotion of the so-called Upper House to the status of a junior partner.
4 Apparently sung to the tune of Onward Christian Soldiers when ever one of Lloyd George's more questionable creations entered a London club.
5 He did have a valid point in this regard, as those who donate money to a political party may well come to expect all sorts of favours in return for the money. Lloyd George's view was that if the donor had already received something tangible in return for his money i.e. a title of honour, it was much easier to resist such pressures.
6 It should be remembered that since it was a coalition government, the money raised was split fifty-fifty between the Coalition Liberals and the Conservative Party, so the latter had as much to lose by raking up the past as Lloyd George himself. But whilst the Conservative share went straight into party funds, the Liberal share went into the Lloyd George Fund whose stated purpose was "to promote any political purpose approved by the Rt. Hon. David Lloyd George" which, as they say, covered a multitude of sins.
7 One of those to later fall foul of this act was Maundy Gregory himself, arrested in 1933 for offering a knighthood for £10,000 to a certain Commander Edward Billyard-Leake for which offence he served two months in prison. He later fled to Paris where he lived for many years until he was interned by the Germans in 1941.
- William Donaldson Brewer's Rogues, Villains and Eccentrics (Phoenix, 2004)
- Matthew Paris and Kevin Maguire Great Parliamentary Scandals(Revised edition, Chrysalis, 2004)
- AJP Taylor English History 1914-1945 (OUP, 1990)