New Year Honours for the great, the good – and the Tory donors

Conservatives reward their corporate backers as financiers and City grandees dominate honours

A Conservative donor who made millions by short-selling banking shares and a property developer who was jailed for his part in one of Britain's largest stock exchange frauds today both receive awards in the New Year Honours list.

New Year Honours List 2012:  
* Knights Bachelor
* Order of the Bath
* Royal Victorian Order, Royal Victorian Medal, and Colonial Police and Fire Service Medal
* Order of the British Empire, Civil - GBE, DBE, CBE
* Order of the British Empire, Civil - OBE
* Order of the British Empire, Civil - MBE
* Diplomatic Services and Overseas List
* Commonwealth
* Military Division
* Sundries

The inclusion of Paul Ruddock, whose hedge fund shorted shares in Northern Rock and Barclays during the financial crisis, and Gerald Ronson, who was convicted for his part in the 1980s Guinness scandal, led to calls from Labour for the way honours are handed out to be re-assessed.

Mr Ruddock, who has donated nearly £500,000 to the Tories under David Cameron, is knighted for his services to the arts. Alongside his work for Lansdowne Partners, which he set up in 1998, he is chairman of the Victoria & Albert Museum and has helped raise millions of pounds for it.

But he was strongly criticised during the financial crisis for capitalising on falling banking stocks. Lansdowne, Europe's fourth-largest hedge fund, is believed to have made close to £100m betting that shares in Northern Rock would collapse and also took “short positions” on Barclays, netting it £12m. The practice was blamed for undermining confidence in the financial system and is banned in France, Italy and Spain.

Mr Ronson is appointed CBE for philanthropy. But the property magnate is better known for his role in one of the largest stock market scandals in Britain. In the Guinness affair, four men were accused of acting to inflate the price of Guinness shares to make a takeover bid for rival drinks company Distillers. Mr Ronson was sentenced to 12 months in prison but served only six and was also fined £5m after being convicted on two counts of false accounting, one count of theft and of conspiracy to contravene the Prevention of Fraud Act 1958.

Now aged 72, Mr Ronson still runs the Heron Group but the award is for raising more than £100m for charities, including the NSPCC and the Prince's Trust. Michael Dugher, Labour's shadow Cabinet Office minister, said: “David Cameron promised to clean up politics, but in office he has shown he is utterly out of touch with decent British people. At a time when millions of families are struggling to get by, it's the Tories' friends in the City who get the rewards.”

Also on the list is the cousin of Damilola Taylor's killer, who was a drug dealer but turned around his life and works with young offenders. But Damilola's father Richard Taylor, said he was “totally against” an OBE for Chris Preddie and called for stricter rules on who should be eligible.

“I don't think honours should be given to such people,” he said. “To be honoured with such a prestigious award when there are hard-working people who have lost their loved ones doing similar work in the community isn't right. I think they deserve it more.”

But Mr Preddie, the cousin of brothers Danny and Ricky Preddie who killed 10-year-old Damilola in 2000, said he hoped his story could become an inspiration to others. “For me, what counts is just trying to be positive. I hope [the OBE] shows the young people out there it doesn't matter who you are or who your family are.”