The Lords Appointments Commission, which promised to open the Upper House to the masses, comes under attack today for giving “people’s peerages” to bastions of the Establishment.

The criticism is all the more cutting since it comes from the Earl of Onslow, whose hereditary title dates back to a political scandal from 1801.

Lord Onslow was responding to an investigation by The Times into concerns over a people’s peerage awarded to Khalid Hameed, the private hospital chief. Lord Hameed, who was helped to his crossbench peerage by Liberal Democrat lords, insists that he had no knowledge that his business partners were the party’s biggest corporate donors.

When people’s peers were announced in 2000, everybody from frontline police officers to advertising reps and hospital nurses were invited to apply, but the actual recipients of the independent crossbench peerages have tended to be less commonplace.

Lord Hameed is former chief executive of the elite Cromwell Hospital in West London, a noted favourite for Arab potentates and their families. He has gone into business with the Indian brothers Dhruv and Bhanu Choudhrie to open a new specialist private hospital in London.

Lord Onslow said: “It’s asking to have a big kick up its arse, the Lords Appointments Commission.”

In a recent debate, he told the Upper House: “Sometimes people’s peers have been announced and the mind has gone into overtime boggling over it.”

He explained to The Times: “I was not attacking the concept of Elspeth Howe [the wife of the former Deputy Prime Minister], whom I admire, like and think is a splendid addition to the House of Lords. It is the concept of her being a ‘people’s peer’.

“The concept even more of Claus Moser, the director of the Royal Opera House. If you had appointed Mick Jagger, you could claim he was a people’s peer, but Claus Moser? No.”

Lord Hameed has always said that he found out about the nearly £400,000 awarded in gifts to the Liberal Democrats from Alpha Healthcare only when contacted by a reporter from The Times.

He sits on both the sister companies to Alpha Healthcare, which is run by the Choudhries, but not on the actual donor company. The donations were published at the time on the Electoral Commission website and reported in national newspapers.

His nomination for the peerage was seconded by Lord Clement-Jones, the Lib Dem party treasurer and chairman of a lobbying firm whose clients include Alpha Healthcare.

The only Lib Dem peer on the commission, Lord Dholakia, praised Lord Hameed when his name came up. Lord Dholakia says that he knew nothing of the donation to his party and so was unable to declare it. However, Lord Clement-Jones said he thought that he probably had told Lord Dholakia about the gifts.

Lord Onslow said: “Why should a company like that want to give money? The bit I find odd is that Hameed didn’t know. It’s always the same. If you say ‘This man has been a big donor to the Liberal party, he is a thoroughly good egg, I can support him’, everybody knows where it’s coming from.

“If you are Michael Ashcroft [the major Conservative donor], everybody hates him but at least people know he gives heaps and heaps of cash about the place. At least it’s known. That seems to me where the whole thing rises or falls. It’s all that really matters.”

After The Times reported the appointment of Lord Hameed in January, the commission looked into the matter and decided that there had been no wrongdoing. Although it spoke to Lord Hameed, it omitted to ask for any evidence from Lord Clement-Jones or from The Times.

In accordance with the commission’s practice, Lord Dhokalia made a full written declaration that he was acquainted with Lord Hameed after the hospital boss was recommended for a peerage.

Professor David Miller, of the University of Strathclyde and a founder of the Alliance for Lobbying Transparency, said: “This is appalling. It brings the stories about party funding, cash for honours, parliamentary ethics and lobbying together in one and it shows the urgent need for tightened regulation of lobbyists.”

Lord Onslow said: “I suspect it’s a cock-up and people not being prepared to admit it’s a cock-up.”

The chosen few

— “People’s peers”, nominated by the public and chosen by a committee, were proposed by Tony Blair in 1999

— Out of 3,200 applicants, the first list was whittled down to 15. They included six knights, three professors, three people appointed OBE and two CBE, and were mostly men

— The latest list, announced in April, consists of two knights and a dame: the former head of MI5, a former European Commission grandee and a leading Scottish businessman

— The Lords Appointments Commission operates in great secrecy. It destroys records of unsuccessful nominations. and will not say who supported candidates

— The commission consists of the crossbencher Lord Stevenson of Coddenham, Baroness Dean of Thornton-le-Fylde (Labour), Lord Hurd of Westwell (Conservative), Lord Dholakia (Liberal Democrat), Angela Sarkis, of the YMCA, and Felicity Huston, a tax consultant

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