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House of Lords: Reform

My Lords, some noble Lords may think that I am lowering the tone of this wonderful debate if I confine my remarks, as I shall, to my special subject: the cost of reform. That is not the sole reason why I oppose election to this House, but it does seem to be relevant that what we are considering is not merely a folly but an extremely expensive folly. Some noble Lords may believe that democracy—if I may stretch that word to apply to the White Paper proposal—is a pearl beyond price and that I am just one of those damned economists who know the price of everything and the value of nothing. It is always difficult to argue with absolutists but I shall make just one point to them. There is one reason and one reason only why electing the Lords is so fashionable at the moment, and that is the so-called cash-for-honours affair. I rather agree with the remarks of the right reverend Primate the Archbishop of York last night, that we should be chary of going into that subject. However, I do not think that I will trespass against that warning if I say that, last year, the three main political parties together spent £98 million. That is rather less than my estimate of the annual cost of 100 per cent election to your Lordships’ House. In other words, we could, if we wanted to solve that problem, simply give the money to the parties. Then we would not then have to worry about changing this admirable House. Other noble Lords, however, will not take the absolutist view but the more usual view. I see the noble Lord, Lord Turnbull, sitting there; as a past Permanent Secretary of the Treasury, he will certainly agree with this. With most goods in public life, it is not a question of being able to pay for them whatever they cost; but if you choose to have one thing, you cannot have another thing. The Government face a budget constraint. So, to put it quite simply, if reforming this House is going to cost a lot of money, that is going to mean fewer teachers, nurses, doctors, soldiers and so on. That seems a common-sense view. It does matter what this costs. When I did my estimates, I did not do it to prove anything particular but to fill a gap in the White Paper. The White Paper provides no costings for its proposals, on the grounds that "““It is difficult to assess the overall cost of any reform to the House of Lords until the final shape of reform is known””." That is true—it is obviously true as far as it goes. But my suspicious mind could not help thinking that it was a jolly convenient truth for the Government since the cost would rather mitigate against their arguments. It was possible, after sitting down for a while, to make some reasonable estimates. I have produced a costing on the basis of such assumptions and estimates. The cost of each election to this House is £30 million. If you want the source for that, it is the White Paper. Each elected Member of this House eventually replaces an appointed Member, and I suggest that each elected Member will cost about two-thirds of what a Member of the House of Commons costs, to reflect their lesser constituency duties. I suggest a pension of £20,000 a year is paid to life Peers who agree to retire, to compensate them in part for the pensions they have not been able to provide for themselves since Members of this House are not paid. That is floated in the White Paper. Extra accommodation is made available in my estimates at a rather conservative rate of one extra workstation for each elected Peer, so they can have someone who keeps in touch with their constituents. Those, I hasten to add, are conservative estimates—they do not, for example, provide for any pay for appointed Peers during the transitional period when the elected Members are going to be paid—but they nevertheless produce monstrous results. Over the 15-year transitional period to an elected House, the extra costs will exceed £1 billion for a 50 per cent elected House, and £2 billion for a 100 per cent elected House. Two billion pounds represents a pile of £10 notes a mile and a half high. Having produced these costings, I had rather hoped that the Government would respond by entering into a proper debate. I was therefore—how shall I put this?—a trifle disappointed at the reaction of Mr Straw when my costings were raised by Mr David Clelland in another place. Mr Straw, the Leader of the House, said: "““Lord Lipsey’s estimate is absolute utter balderdash and nonsense? It cannot be the case that a partly elected other place would cost £1 billion when the total cost of this place … is £300 million””.—[Official Report, Commons, 7/3/07; col. 1554.]" Absolute utter balderdash and nonsense—moi? Mr Straw’s main error was in the costing of the House of Commons. How would he know—he’s only the Leader of the place. He said that the figure was £300 million; in fact, for the latest year it is £468.8 million. For that, see the Written Answer from the noble Lord, Lord McKenzie of Luton, to a Written Question from the noble Viscount, Lord Tenby, on 28 June 2006 at cols. WA 168-70. But that is only the minor error. The major error is that he compared my costing for a full 15-year period with the annual cost of the House of Commons. As a long-term friend and admirer of Mr Straw, it pains me to say what I now have to say: that he was talking absolute utter balderdash and nonsense. Mr Clelland pointed that out to him but apology came there none. I am sorry to say this of an old friend, but Mr Straw misled the House. In my knowledge of the other place, which is less than that of many other Members of this place, Ministers who mislead the House are expected to apologise; but I am long enough in the tooth not to have had high expectations that he would do so. Who would want to admit to making a howler that would make any schoolboy blush to the roots? I do not even ask him to apologise for misleading the House. I will be quite satisfied if he does something else: let him now publish the Government’s best estimate of the cost, saying where his assumptions differ from mine. Let him level with the electorate and see then if his proposals retain their support. I agree with what the noble Lord, Lord Higgins, said earlier in the debate, that this matter cannot be settled by pledges in manifestos which voters barely read; it can be settled only in the way that major constitutional issues are generally settled in this democratic era, in the way that devolution was settled and Europe was eventually settled, and in the way that the Government once proposed to settle voting reform—by a referendum in which every voter has his or her right to be heard. During such a referendum voters would learn more about the proposed change and about the virtues of this House, and far more than Mr Straw chose to disclose about the cost of what he is proposing. I am confident that they would then reject it, as I trust your Lordships will reject it tomorrow.