Eyebrows were raised when Sir Alan Sugar was granted a peerage. But do business leaders strengthen the House of Lords and what are the personal rewards?

Is there a higher reward for a business leader than being asked to sit in the House of Lords? Sir Alan Sugar, awarded a knighthood in 2000 for his services to business, became Lord Sugar when he was ennobled by Gordon Brown in July after accepting a role in government as "enterprise tsar".

He told Sky News that he accepted the peerage and the new role because "they need someone now in these emergency economic times who has been there and worn the T-shirt on what to do as far as business is concerned. That is what interests me most, I am doing it because of the need of the country."

Lord Sugar joins other businesspeople in the upper house including Lord Bilimoria (founder of Cobra Beer); Lord Carter (former chief executive of Ofcom); Lord Turner (former director general of the CBI); and Lord Kalms (former chairman of Dixons Group).

Lord Sugar, having been accepted by the House of Lords Appointments Commission as a non-party political life peer, will have met a strict set of criteria. The commission, using a remit placed on it by the government in 2000, seeks to recommend people "with a record of significant achievement within their chosen way of life that demonstrates a range of experience, skills and competencies... who are able to demonstrate outstanding personal qualities-in particular, integrity and independence".

In 2005, when Sir Bob Geldof announced he would consider accepting a peerage after topping a Radio 4 poll for the person listeners would most like to see in the Lords, he said he could see how the honour would help him play an even greater role in society. "I have got fairly good access anyway but as this is a legislative body there are many more people that I would like to get to and talk to and form coalitions around, and that would interest me very much," he said.

Entrepreneur Alex Pratt agrees that there's an advantage to accepting a peerage in terms of widening and deepening "the already impressive networks of such people". But if anything, he adds, peerages and honours give them a platform to push forward the things they really believe in. "I am sure that they actually get in the way of business success rather than the other way around, despite the popular view that everyone in public life is only out for themselves," he says.

Yet finding many supporters of Sugar's appointment is difficult. Before the Appointments Commission even confirmed the recommendation, Liberal Democrat peer Lord Oakeshott wondered whether the tycoon was a "fit and proper person" to sit in the Lords. And numerous newspaper columnists have speculated that the peerage is just an attempt by the prime minister to grab headlines and some of the reality TV star's popularity.

As Rachel Elnaugh, former Dragons' Den panellist and now a business consultant, comments: "I do think generally that we need to be getting more businesspeople into politics, whether it's in the Commons or the Lords, because we desperately need to rebuild the wealth of the country and it needs a more business-savvy, strategic approach. Many politicians really haven't got a clue about what it's like to be a businessperson. But I think the political motive of the Sugar appointment is questionable and it's about Gordon Brown trying to add a bit of charisma."

It's also reignited a debate about the government's approach to choosing peers. Much of it revolves around Brown's "goats", or government of all the talents—his attempt to add expertise to the government by bringing in non-politicians from business or the professions by offering them a peerage and/or a ministerial role.

The tactic isn't working too well: Lord Jones, Lord Darzi, Lord Malloch-Brown and Lord Carter have all now quit the government. Lib Dem health spokesman Norman Lamb said: "A short spell as a minister seems to be the new route into the House of Lords." And the Commons Justice Committee described the government's approach to picking peers as "ad hoc and piecemeal". The prime minister's habit of appointing public figures to the Lords to take on government roles was, it said, "unsustainable".

Michael Moszynski, co-founder of ad agency London, strongly feels that while a peerage sets people apart, and is an honour to receive, the government is "debasing its currency" in more ways than one. "Here's a Labour government that's committed to creating an elected second house, and yet they're using it expediently by bringing in people for their popularity to shore up their support," he says. "These political machinations start devaluing the currency."

But he has another concern. How can new peers contribute to the workings of the upper house, scrutinise legislation, and consider issues of significance if they're still committed to their business? "You need people who are no longer self-interested but have an intelligence and experience that can help guide and review legislation," he says. "It shouldn't be seen as a way to improve business connections and the appeal of their business. If somebody's a peer, they should be removed from the executive management of their business."

Peerages and honours are still about respect rather than reward though, says Pratt. The hullabaloo about Sugar's peerage is because "any recognition in the UK sets you up to be shot at and pulled off your perch by our incessant crabs in a barrel". He concludes: "From small beginnings to end up in the Lords must give Alan Sugar a warm glow on the inside. No matter what the rest of us think, he will know that he achieved it as a result of his life choices."