Some people are for turning the House of Lords from an appointed to an elected House of Lords, and some are against. The arguments bat to and fro; but one has so far received virtually no attention: the cost of the government’s proposals for election. In the first five years reform could end up costing £433million, according to my detailed calculations. That’s enough for 80,000 hip replacements or a year’s salary for 21,000 nurses. Which, I wonder, would the public prefer? – a better health service or another gang of professional politicians.
The government gives no costing in its proposal (Cm 8077) but from published material, it is possible to work through the basic costing. At the moment Peers cost the taxpayer around £19 million per year in the daily allowance given to us based on attendance as well as any travel, office and other costs we claim. (The figure is based on an average cost per member per sitting found from the latest available quarter of HoL costs which can be found here: http://www.parliament.uk/documents/lords-finance-office/2010/members-financial-support-201011-Q3-v1.pdf).
The draft bill proposes that members of the reformed Lords will be either partly or wholly elected. In the first Parliament under the new system, there will be 100 new elected members while two-thirds of the current remain. At the current size of the house (828), that would mean a House totalling 652 members. The draft also states that all members of the reformed House will receive a salary. That is, both the 100 newly elected members and the remaining 552 ‘transitional’ Peers from the previous House (Para 109, Cm8077).
The bill says that the salary for these members should be somewhere between the salary for MPs and Members of the Scottish Parliament and Welsh Assembly (Para 111, Cm8077). Provisions for pensions will also have to be made. Taking the average of MPs’ and MSPs’ current salaries a reasonable estimate for Members’ salaries and pensions in the reformed House is around £79,500.
Based on this, the salary and pension expenses of the House in one year would come to £52million. That doesn’t include the other expenses that Members will have to be allowed to claim. A conservative estimate is that new Members would spend about two-thirds of what MPs currently spend on their expenses and that the old ‘transitional’ members would only use about a quarter of what MPs currently claim. For the existing peers this comes to £38,000 which is roughly what it costs to hire a secretary/PA in London
An important additional cost to include, however, is extra elections. The best estimate is around £113 million. That’s based on the Government’s official estimate for the cost of the AV referendum (somewhere between £106 and £120million, available from Hansard, Col WA338, 18 May 2011). It could be higher since the proposals recommend an STV voting system which would probably need a heavy investment in electronic voting machinery.
Add all this up and over the first five years you get to £433m.
There’s no doubt that the House needs reform. I would be among the first to support the right kind of proposals and there’s no reason why they can’t be radical. The Lords needs better procedures, a more transparent method of appointing its members and, for sure, a cut in their numbers. A package of measures along these lines would save money – whereas the government’s proposals represent an extravagant way for the Conservatives to try to pacify Nick Clegg and his party.