Nick Clegg pledges Lords reform


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Indy Politics

Deputy Prime Minister Nick Clegg today reaffirmed his determination to press ahead with reform of the House of Lords over the coming year.

In a wide-ranging speech designed to restate his liberal beliefs, Mr Clegg denounced the unelected upper house as "an affront to the principles of openness which underpin a modern democracy" and confirmed that a reform Bill will be introduced next year and forced through by use of the Parliament Act if necessary.

Unelected peers were one of a string of unaccountable vested interests in the banks, business, politics and the media at which the DPM took aim, in a clear attempt to establish a distinct identity for his Liberal Democrats at a testing time for the coalition.

He warned the City of London, on the eve of bonus season, that the Government was ready to block any "irresponsible" payments in partly state-owned banks RBS and Lloyds.

And he said he will unveil reforms in the New Year designed to "rewire the power relations in our economy" and build "responsible capitalism" by giving shareholders more power in the boardroom and workers a greater stake in their companies.

Hailing the liberal idea of the "open society", he promised to "promote fairness, liberalism and openness" against "the forces of reaction and retreat" that threaten to take hold of the country at a time of economic uncertainty.

While claiming some common ground with the Tories, the Deputy Prime Minister sustained his weekend assault on his power-sharing partners' proposed tax break for marriages, accusing some Conservatives of wanting to return the UK to the 1950s.

And he let rip at eurosceptics for putting "narrow national interest" above "enlightened internationalism" - pledging the UK will "re-engage" with EU partners on a range of issues.

The Deputy Prime Minister set out plans for an 80% elected upper chamber in May this year, and said then that the Government intends to bring forward legislation in 2012. A cross-party committee of peers and MPs was set up to consider the proposals.

But the lukewarm response from Conservative coalition partners, coupled with the humiliating referendum defeat of Liberal Democrat proposals for voting reform, have led some allies to urge him not to make further constitutional reform a priority.

Speaking in London today, he acknowledged that he had been warned not to be outspoken on the issue, but added: "I'm afraid this is one boat that urgently needs rocking."

Describing the second chamber as "perhaps the most potent symbol of a closed society", Mr Clegg said: "Of course among our peers there are those with valuable experience and expertise. But a veneer of expertise can surely no longer serve as an alibi for a chamber which legislates on behalf of the people - but is not held to account by the people."

"The Lords as currently constituted is an affront to the principles of openness which underpin a modern democracy.

"So we will have a House of Lords reform Bill in the second session of this Parliament. I am hopeful that we can secure a significant degree of cross-party consensus on this, and indeed support from Lords themselves. But let there be no doubt: if it comes to a fight, the will of the Commons will prevail."

Turning on the banks just hours before Chancellor George Osborne's announcement of the Government's response to the Vickers report on reform, he said: "We took a tough line on bank bonuses last year, particularly in the banks where the Government is the biggest shareholder. We ensured that the bonus pools in RBS and Lloyds shrank, that all bonuses paid to chief executives and executive directors were entirely in deferred shares, not in cash and that a limit of £2,000 was placed on cash bonuses.

"The profound impact of the banking implosion on our economy, and on our society, has since become even clearer. There has been no lessening of public anger towards the banks - and there will be no let-up in the Government's determination to keep the clamps on bonus payments.

"So, on the eve of bonus season, let no one be in no doubt about our determination to use our clout as the major shareholder in these banks to block any irresponsible payments, or any rewards for failure."