Hereditary peers are for the chop, but life peers still have their uses. Last October the process of ennoblement allowed Keir Starmer to appoint a minister of state for investment in rapid preparation for his investment summit of that month. Finding no-one on the green benches who took his fancy, he turned to Poppy Gustafsson, a chartered accountant who went on to co-found the cyber security firm Darktrace, for which she served as chief financial officer followed by chief executive until it was sold to a private equity firm last year. In order to take up her government post she was hastily installed in the Lords as Baroness Gustafsson of Chesterton in the City of Cambridge.
Trouble is that the House of Lords Appointments Commission is not happy. It complains that it was only given 48 hours to vet her prior to the announcement of her appointment. That seems an especially tight timeframe given that her career has been touched with some controversy. While there is no suggestion of any wrongdoing on her part, she has held senior financial positions in two companies which have been subject of allegations involving serious issues in the accounting department. First, she worked for Autonomy, the Cambridge tech-firm founded by the late Mike Lynch – a position to which she was appointed after auditing the company’s accounts for her previous employer, Deloitte. Autonomy was later taken over by Hewlett Packard, which claimed it had been misled by the company’s accounts as to its true value. Hewlett Packard pursued Lynch through the US courts, which acquitted him on all charges last June, two months before his tragic death when his yacht sank in a storm off Sicily.
Darktrace’s accounts became the subject of controversy, too, in 2023 when a New York hedge fund Quintessential Capital Management published a report allegeding accounting errors, causing the share price to fall sharply. The hedge fund was shorting Darktrace’s shares at the time. Darktrace’s shares recovered after a report into the company by accountants EY revealed small errors but nothing which appeared to justify the hedge fund’s concerns.
Darktrace and Gustafsson may merely have been the victims of aggressive short-selling – once a hedge fund has committed to shorting your shares it does of course have a vested interest in trying to push down their value. Nevertheless, there is something a little concerning when a prime minister claims to be reforming the House of Lords to improve its democratic legitimacy yet then uses the upper chamber to install his chosen appointees in government at short notice. A vetting procedure which is only allowed to last 48 hours is hardly a vetting procedure at all – more a rubber-stamping process.
It all rather adds to the argument that if you are going to reform the House of Lords, do it properly and turn it into a fully elected chamber, so that we can all have a say as to who gets to sit there, and have an election campaign in which to dig over a candidate’s history. After all, we lecture the rest of the world on the merits of democracy all the time – so why not actually practice it?
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