Ex-PM David Cameron has sparked an outcry with a crony-filled resignation honours list that 'would embarrass a medieval court'

Ruritania is an imaginary and ridiculous little country which film buffs will know was once ruled by Peter Sellers, previously of The Goon Show.

He made himself popular by handing out medals, honours and membership of the aristocracy to all and sundry. Britain 2016? The parallels are uncomfortable.

And I speak as one who took a knighthood but turned down a peerage, as I will explain later.

David Cameron has set a new standard of generosity in thanking his staff and friends through the honours system. He is a very courteous man who would always say ‘thank you’.

But the crowd of aides who came to the door of No 10 to wave him goodbye were queuing up for more than a ‘thank you’. Most of them received an honour.

David Cameron isn’t the first Prime Minister to have left behind a nasty smell as a result of such cronyism. The great reforming Liberal Prime Minister and war leader David Lloyd George is now remembered for selling honours to replenish party funds.

Harold Wilson, who won four elections, is now remembered for his ‘lavender list’ ennobling his kitchen cabinet and various dubious businessmen. Even such austere and outstanding leaders as Clement Attlee and Margaret Thatcher felt the need to accept hereditary titles for their families.

Our current political mores have been shaped by almost two decades of Tony Blair and David Cameron. Both governed competently overall and made major, necessary reforms, but each will be remembered for one catastrophic error (Iraq, the referendum) and a departure shrouded in sleaze.

Britain is not unique in political corruption, cronyism and the buying of office. Donald Trump makes a virtue out of the fact his personal fortune has financed his rise rather than money from donors even dodgier than himself.

There are scandals aplenty in other leading democracies: Germany, France, Italy, India, Brazil. But none of them go so far as to make membership of one House of Parliament a tradable commodity, as we do.

In an extraordinary move, Mr Cameron placed head of honours committee Laura Wyld into the Lords and gave his chief spinner Craig Oliver a knighthood

Cynics would say the indignation over honours will pass. The public will complain that the system stinks but accept that it works tolerably well. And anyway, they will add, what is wrong with rewarding chums who have worked hard under pressure and shown loyalty.

Anyone who is so complacent as to excuse the Cameron list so easily is ignoring the rising tide of public disillusionment with our political institutions.

Post the expenses scandal, post the financial crisis, post referendum: many people no longer give politicians the benefit of the doubt. They simply assume that they are looking after themselves and their friends. And along comes Mr Cameron to prove them right.

There is an important distinction between ‘gongs’ – CBEs and OBEs up to knights and dames – and peerages. ‘Gongs’ are designed to recognise public service and the vast majority are non-political, well deserved and greatly valued.

There are many remarkable people, unsung local heroes, and, sadly, only a fraction of them are formally recognised. An OBE for the Prime Minister’s wife’s style guru adds insult to their injury.

Also honours were Charlotte Vere who is joined the House of Lords and Andrew Cook, a party donor who has been knighted

Honours inevitably pander to vanity, and I plead guilty.

I accepted a knighthood and thoroughly enjoyed the day at the palace with my family and the subsequent public recognition the honour brings. Sometimes I wonder if I really want to be in the same exclusive club as the likes of Sir Philip Green, but at least we no longer have Sir Robert Mugabe and Sir Jimmy Savile. And the honour is just that, no more.

Peerages are different. They confer political power, the right to pass laws and sit in Government as a Minister. David Cameron has just appointed 13 Conservatives (there were two cross-bench mandarins and Jeremy Corbyn’s sole nominee, Shami Chakrabarti, an admirable and impressive campaigner for civil liberties who seems to have been rewarded for a less admirable whitewash of anti-Semitism in the Labour Party).

David Cameron’s list includes a person who organised his visits (so he wasn’t photographed under an exit sign), and various party fundraisers and political advisers. They are, apart from a Yorkshire MEP and a Scottish councillor, very much part of the Westminster bubble.

Most are obscure and have never been elected to anything. They are also mainly young and can look forward to decades sitting in Parliament, passing laws, accountable to no one, with a meal ticket for life.

I had the opportunity to go to the Lords after leaving Parliament. I asked not to be considered. That doesn’t make me particularly virtuous. Several of my retiring Lib Dem colleagues did the same.

And my own motives were partly personal, including a wish to do other things after 18 years in Parliament. But I also felt strongly that, having repeatedly voted in the Commons to end patronage and heredity for peers, I couldn’t accept a peerage myself.

Principle apart, the numbers are utterly ridiculous: more than 800, making the Lords the biggest second chamber in the world after the Fiji assembly of tribal chiefs.

Such indulgence is all the worse (and resented in the Commons) because the number of MPs is currently being culled under boundary revision.

More peers should follow the example of Shirley Williams who recently resigned her peerage when she felt she could no longer perform at her best.

But inevitably, in the absence of term limits, the least useful cling on like limpets.

Many peers do an excellent job improving laws. Some of the legislation from departments like the Home Office is a disgrace and the Commons is notoriously sloppy in passing bad legislation. Those peers who work hard to create better laws deserve due credit, but we need fewer than half of the current numbers to do this.

So what is to be done? Lords reform must go back on the agenda. The sabotaging of Nick Clegg’s plans three years ago had the effect both of poisoning relations in the Coalition and also bringing Parliament as a whole further into disrepute.

There are genuinely tricky issues in getting a Lords which is sufficiently accountable through election without creating deadlock between two Houses (as in the US) or further undermining the Commons.

The impotence of the Commons has been brutally exposed after being bypassed through the referendum and by the non-parliamentary take-over of the Labour Party.

But almost every other democracy apart from Britain seems to have cracked this problem.

Second, our corrupt system of party funding invites abuse.

I don’t criticise the party donors for spending money on democracy rather than luxury yachts. Some ennobled donors are also impressive people, who built up businesses. But it is fundamentally wrong that political office should be bought and sold.

It is time to put severe limits on what parties can spend, nationally and locally, within and between elections, as well as on individual donations.

Time will tell how damaging David Cameron’s cronyism will be. But I believe we are quite near to a breakdown in trust in democracy itself.

If that happens, politics will move to the streets. Or we shall find populist, anti-democratic demagogues seriously bidding for power, as they already are in the US, France, Turkey and elsewhere. A high price for a few lengths of ermine.