Rumours of ‘cash for peerages’ have long been rife at Westminster, and today's release by my two colleagues and I is an attempt to begin contributing some greater factual basis to the debate, rather than the usual “He said, she said” that such an important topic is usually reduced to.

By focussing on the ‘big picture’ and the numbers involved, rather than individual cases, our study made some startling discoveries, including the sheer improbability of so many people from the three parties’ small pool of big donors all being nominated to the Lords, which is equivalent to winning the National Lottery five times back-to-back. The relationship between donations and peerage nominations is statistically significant, and it looks spectacularly unlikely that something fishy isn’t going on. While the figures are not in themselves a ‘smoking gun’, and while none of the data should be used to reflect on any individual cases, the broader patterns are quite damning for how politics is done - and funded - in this country today. None of the three main parties comes out of this particularly well.

But the question for liberals is what this means for them. Liberalism is about power; or at any rate, a mistrust of power, a mistrust of abuses of power, and a hatred of monopoly. The dispensation of patronage by the major figures of the state, and their ability to appoint legislators for life - something Conrad Russell reminded us Liberals have been decrying for three hundred and fifty years - is itself a feudal monopoly unheard of in almost every modern democracy. As long as parties are desperate for funding to keep stoking the campaigns ‘arms race’, and as long as party leaders have it in their gift to nominate legislators for life, it seems likely that this cloud of suspicion will continue.

All parties should put their money where their mouth is, and release a serious package on reforming the Upper House. In our report, we suggest just such a package of reforms to tackle the problems identified. We note that nothing like the same concentration of big donors is to be found in an elected chamber like the House of Commons, and Gladstone’s rallying cry of trust in the people should be embraced, and an elected second chamber enacted. A serious cap on big money is also long overdue - we note that the vast majority of peers donate less than £2,000 a year. There is no reason why a £2,000 annual donations cap from individuals should not be implemented. In return, the raising of existing state funding for political parties to cover the void left by big donors should mean that there is simply no need for parties to turn to big donors. If there is no need, then there is no incentive to sell peerages, and all suspicion can be removed.

State funding of parties has long been considered politically toxic by those with a stake in the status quo, and an ideological no-go zone for others. But while this government thinks nothing of spending over £1 billion a year on the Environment Agency, it agonises over the issue of spending the tens of millions required to fund political parties that could then afford to be independent, and to promote the kind of lively, civic political culture which engages with citizens rather than big donors.

Allegations of ‘cash for peerages’ are toxic, because they strike at the heart of two major problems: the way that parties are funded, and ongoing lack of democracy at Westminster. Traditionally, Liberals and Liberal Democrats have been at the forefront of pleading an articulate, coherent case for constitutional reform to involve citizens and communities. If cries of ‘cash for peerages’ continues to recur, then it will be to the shame of this government - and the Deputy Prime Minister who took personal responsibility for overseeing constitutional reform - and liberals will have a lot of making up to do to convince voters that they are serious about this issue. Now is the time to be ambitious in leading the debate, not following, and certainly not by being the subject of a string of tawdry donation scandals. It is at times like this that liberals need to ask themselves why they went into politics in the first place, and what they can do that is true to those ideals.

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