Time for progress on House of Lords, says David Cameron


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David Cameron said it was "time to make progress" on House of Lords reform as the Government published legislation to create a mostly-elected second chamber.

The Prime Minister insisted voters were in favour of the change as he prepared to take on a growing revolt within Tory ranks against the shake-up.

Warning supporters they had to "get out there and back it" or face defeat, he also laid into Labour for attempting to derail the Bill's progress.

Mr Cameron spoke out in the Commons just minutes before the legislation - which looks set to seriously strain the Tory/Lib Dem coalition - was formally introduced to Parliament.

It would introduce an 80% elected Upper House and slim membership down from 800 to 450.

A date for the opening debate - and a crunch vote on the timetable for its progress - will be announced by Commons Leader Sir George Young tomorrow.

It will be held before MPs depart for their summer recess on July 17.

"We have been discussing this issue for 100 years and it really is time to make progress," Mr Cameron said.

"There are opponents of Lords reform in every party. But there is a majority in this House for a mainly-elected House of Lords and I believe there's a majority for that in the country.

"If those who support Lords reform don't get out there and back it, it won't happen. That is the crucial point."

He attacked Labour leader Ed Miliband as "hopeless" for backing the reforms but seeking more days to be allocated to debating the legislation.

Labour is to join with Conservative rebels to vote down a motion setting out its passage through parliament.

Ministers aim to make the Bill law by the spring but a defeat on the timetable would pave the way for as much as four or five weeks of debate in the autumn, which would swallow up time needed for other business.

Conservative opponents of reform - of whom there are thought to be as many as 100 in the Commons - would also seek to use the opportunity to "talk out" the legislation.

The Bill, approved by Cabinet with "strong support" from ministers yesterday, is being driven by Deputy Prime Minister Nick Clegg as the remaining centrepiece of Liberal Democrat constitutional reform plans, following defeat in last year's referendum on voting reform.

It would finally complete the removal of hereditary peers from the Second Chamber and introduce the first elected members in tranches of 120 at each of the next three general elections, with the process of change completed by 2025.

Elected members would serve for a single 15-year term.

In a concession to critics, ministers have scrapped plans for a salary of about £60,000 for members of the new Upper House.

Members will instead receive £300 for each day they attend - a maximum of about £45,000 a year - and this sum will be taxed, unlike the attendance allowances currently paid to peers.

Ministers insist that the reforms will maintain the primacy of the House of Commons within Parliament. But critics warn that this will be under threat once the Upper House has the added clout of democratic legitimacy.

Sources close to the Prime Minister denied that Conservative MPs were being given "a nod and a wink" that they could rebel over Lords reform without suffering consequences.

Asked whether Tories were subject to only "gentle" whipping on the Bill, one source said: "That is not the case. I do understand that some MPs believe that is the case, but by the end of the day they will be corrected on that."

Any minister or parliamentary private secretary who votes against the Bill will lose their jobs, while backbenchers would find that rebelling was "an interesting career move", said the source.

"It is a Government bill and it will be whipped like all Government bills."

Tory Commons aide Conor Burns has said he is prepared to sacrifice his job in order to rebel on the issue amid claims from some rebels that a majority of backbenchers are opposed.

Justice Secretary Ken Clarke said it would be a "terrible mistake" if Tory backbenchers decided to "lark about and upset the Liberals" by disrupting the Government's programme.

He told BBC Radio 4's World At One programme: "As a party member, to show your commitment by actually wrecking the Government's legislative programme, which is actually what they would do - I think that is pretty bizarre."

"It's bound to be a compromise," he added. "The problem is there isn't a solid majority on almost any detail - bishops, electoral system."

Conservative MP Jesse Norman, who is campaigning against the reforms, said the Bill was a "total nonsense".

He told the programme he would "absolutely without any question" vote against it and the Government's timetable.

"It is a constitutional monstrosity of a Bill," he added.

Even after it is reformed, the chamber will continue to be known as the House of Lords - though its members will not be able to call themselves 'Lord'.

A Cabinet Office spokesman said it would be up to Parliament to decide whether they would be referred to as Members of the House of Lords (MHLs) or another title.

The legislation also allows the prime minister of the day to place up to eight unelected ministers into the second chamber.

Once there, they would be eligible to serve three terms even if they lose their ministerial role or the premier who appointed them loses office.

The London inter-bank offered rate (Libor) and its equivalent in Europe, Euribor, reflect the rates that banks demand to lend to one another overnight.

The FSA said that during the financial crisis Libor submissions were reduced due to senior management's concerns about negative media comment.

The regulator added that submissions on Libor and Euribor took into account requests from interest rate derivatives traders, who were motivated by profit and sought to benefit from Barclays' trading positions.

The breaches involved a significant number of employees and occurred over a number of years, the FSA added.

Mr Diamond said: "I am sorry that some people acted in a manner not consistent with our culture and values.

"The events which gave rise to today's resolutions relate to past actions which fell well short of the standards to which Barclays aspires in the conduct of its business.

"Nothing is more important to me than having a strong culture at Barclays."

He added that the bank took prompt action to fix the problems and co-operated extensively with the authorities.

Mr Diamond took a £2.7 million cash bonus last year despite widespread criticism that his pay failed to reflect the struggling performance of the bank.

Overall, his package was worth £17.7 million including a £5.7 million tax payment made on his behalf.

The FSA said Barclays' breaches of its requirements involved a significant number of employees and occurred over a number of years.

Tracey McDermott, the FSA's acting director of enforcement and financial crime, said: "Barclays' misconduct was serious, widespread and extended over a number of years.

"Making submissions to try to benefit trading positions is wholly unacceptable.

"Barclays' behaviour threatened the integrity of the rates with the risk of serious harm to other market participants."

Barclays is the first major financial institution to settle with regulators following a wide-ranging probe that has spanned North America and Europe.

Officials are investigating whether banks deliberately tried to manipulate Libor by submitting inaccurate data during the financial crisis, including holding down their rates to make them appear safer than rivals.

In the United States, the Commodity Futures Trading Commission (CFTC) brought attempted manipulation and false reporting charges, leading Barclays to agree to settle a penalty of 200 million US dollars (£128.2 million).

In addition, as part of an agreement with the US Department of Justice (DoJ), Barclays admitted to its misconduct and agreed to pay a penalty of 160 million US dollars (£102.5 million).

The breaches mainly occurred between 2006 and 2008, a period when John Varley was at the helm of the company and Mr Diamond led Barclays Capital.

The £300-a-day maximum pay limit desired by the Government is not set down in the Bill - which says only that elected Lords members must not earn more in a year than an MP.

But a senior Liberal Democrat source said it would be "unreasonable" for the Independent Parliamentary Standards Authority (Ipsa), which will set rates, to make it any higher than that.

"It's a lot of money, if you look at what average salaries are - it's a very generous assumption," he said of a £300 cap.

He said the aim was to get people elected who had other interests to replicate the wide expertise of many of the the present Lords, meaning they would not claim every day.

The Cabinet Office expects the costs of salary, staffing and administration costs of the new-look House to rise from the present bill for the House of Lords.

But a spokesman claimed a reduction in the number of MPs would cut costs in the Commons, meaning the overall burden on the taxpayer would be "broadly" the same in real terms by 2025.

Those sums are based on a £300 daily allowance and on members attending 75% of the time.

Under the terms of the House of Lords Reform Bill, elections for the second chamber would be held alongside general elections, starting in 2015.

A form of proportional representation known as "semi-open list" will be used, where voters can opt to vote either for a political party or an individual candidate.

The 90 non-elected members will be appointed by a statutory Appointments Commission on a non-party basis.

And, in a move which has angered many supporters of reform, they will be joined by 12 Church of England bishops - down from 26 church representatives.

To deal with opponents' claims that an elected second chamber will undermine democracy, the Bill also includes a specific commitment to retain the Parliament Acts of 1911 and 1949.

They allow for the Commons to overrule the Lords in certain circumstances to force through measures. The Government has threatened to invoke them to push through Lords reform.

Mr Clegg said: "The coalition stands on the brink of an historic achievement. After more than a hundred years of debates, cross-party talks, Green Papers, White Papers, Command Papers and a Royal Commission, we are finally introducing a Bill to create a democratic and legitimate House of Lords.

"It cannot be right that ordinary, hard-working people are expected to obey laws that are created by people appointed entirely by birth or patronage, who have a generous pay packet and a job for life. The time for idle talk is finished. Now is the time for action."

Mr Burns, parliamentary private secretary to Northern Ireland Secretary Owen Paterson, said he would join the Tory revolt.

"If I lose my job for something that was a mainstream view within the Conservative Party in the last parliament, which serving Cabinet ministers held as their view, so be it," he told the BBC.

The Prime Minister was also reminded of senior backbench concern by ex-minister Bernard Jenkin who suggested the Government should be concentrating its efforts on the economy.

Foreign Secretary William Hague told Sky News: "All three parties fought the last election committed to a largely elected upper house, so I think it is right to get on with it."

He dismissed the arguments for a referendum: "I don't think people want a referendum about everything. We use referendums quite sparingly in this country. There wasn't a referendum about the last change to the composition of the House of Lords in 1999 or in 1958 or the big change in their powers in 1911.

"So there is no precedent for having a referendum on this particular subject."

On official estimates, the reformed House of Lords will end up costing the taxpayer an extra £150 million per five-year period than at present.

And it is also expected that £3.8 million will be spent on a publicity drive to raise voters' awareness of the new elections, which will cost around £85.7 million per time.

Costs are expected to be £7.4 million a year higher than at present during the first term, £10.5 million during the second and £13.6 million thereafter.

Labour peer Lord Lipsey claims the costs could run as high as £484 million over five years, although his sum also includes a referendum on the changes.