Johann Hari: Don't reform the House of Lords - close it

With PR and weighty select committees, there would be far better checks and balances

One day soon, there will be a fateful knock on the door of 10 Downing Street. It will be the police, investigating the alleged sale of peerages - but it might as well be the ghost of Maundy Gregory. He is a mouldy footnote in the history books now, but Gregory once carried with him the electric zing of power in his role as David Lloyd George's peerage salesman. He was tasked by the prime minister with selling off coveted places in the House of Lords to the super-rich in return for hefty financial donations, and he is still the only man ever to be jailed for it. As Scotland Yard's investigation slowly works its way up to the Prime Minister himself, Gregory could soon lose this dark distinction.

The stink caused by the dependence of all our political parties on billionaires is going to make the British people recoil and retch for some time to come. (Remember: tonight the Shadow Chancellor, George Osborne, is hosting a dinner for his party's biggest donors to ask their "advice" on economic policies - and even the Liberal Democrats' biggest donor is caked in sleaze allegations). But so far, our rage is being misdirected. It is only by giving politicians a safe, clean supply of state funds to run their campaigns that we can wean the Blairs, Camerons and Campbells off their addiction to the electoral crack doled out by billionaires for their own obvious purposes.

But this option is barely being discussed. Instead, the political fallout from this scandal is falling on the red leather wasteland of the House of Lords. The solution rushed out is to democratise the Lords. The whispers in Westminster are that Blair is poised to agree to an all-party compromise: some 70 per cent of the Lords will be elected, and the remainder will be appointed. It is clearly wrong, wrong, wrong for a person to make laws you and I have to obey if we had no say in choosing them and have no way of kicking them out, so, at first glance, an elected House of Lords seems unquestionably right. My knee jerks in its favour.

But there is a major drawback to an elected second chamber. When a country has two democratically elected chambers (think the US, Germany, Italy) it is virtually guaranteed long periods of political paralysis when the second chamber blocks the first - and very little happens. Gridlock shuts down all political traffic for years on end. One of the reasons the US has an incredible 40 million people limping along with no healthcare insurance is because, even when a government is elected with a clear mandate to introduce it, the programme gets lost in the logjam of competing houses.

How democratic is it to ensure that our democratically elected government can do virtually nothing? Of course, if you believe - like Thatcher and Reagan - that big government is a curse and the best government is a shrunken and frozen one, then this is great. Go for a second chamber and rub your hands with glee while the elected government looks on helpless as other forces run the country. But if you are even vaguely leftish - if you believe that government action is often essential to deal with the problems thrown up by markets - then an elected second chamber begins to cause frown lines. Yes, a more legitimate second chamber would have prevented some terrible chunks of government policy over the past eight years: the internment of suspected jihadis, identity cards, the restrictions on free speech. But they could well have prevented many of the good things: the (too mild) redistribution of wealth, SureStart, baby bonds, wind power, gay marriage. All but the most bland bits of legislation will be held up for years on end, or lost forever.

True, the proposal Blair is poised to green-light would still leave the new House of Lords slightly less legitimate than the House of Commons. In theory, the Commons would still be able to overrule the only 70 per cent-elected Lords. But does anybody doubt that a chamber stuffed with people who have fought gruelling, duelling elections will be far more assertive and far more inclined to say "no, no, no" than the meek, elderly Quango of the Dead that currently sits in the upper house? If we continue on this, our current, road away from cash for peerages, we will end up with the worst of both worlds: a deadlocked legislature and political parties still owned by the super-rich. Despite the British people believing in Sweden-style higher taxes and higher spending, we will become even more like the 51st state of Bush's America.

But what is the alternative? The status quo is clearly intolerable. An appointed chamber of the corrupt and the crony, with the odd ex-statesman or genuine expert thrown in as cover, cannot survive. So we have to ask - what is the function of the second chamber? It is to provide checks and balances, to ensure the Commons does not rush into bad or foolish legislation, and to prevent democracy from descending into a tyranny of the majority. Can these functions be carried out better elsewhere? I think they can - within a remade House of Commons itself.

The keys to getting there lie jangling within the pockets of the recent Power inquiry into rejuvenating Britain's democracy, led by Helena Kennedy. Its core proposal is to bring us into line with every other democratic country in Europe and introduce proportional representation for the first chamber.

Because no political party has won a majority of the popular vote in this country since the 1930s, it is safe to assume this will require the Prime Minister to form a coalition with smaller parties. The requirement for a coalition places a huge check on governmental power, especially since coalitions can crumble at any moment. PR would probably have prevented Tony Blair from participating in the invasion of Iraq, for example, unless - political suicide - he had been prepared to form a National Government with Iain Duncan Smith's Tories.

In case this is not check and balance enough, the Power inquiry recommends another big block on governmental authority - giving real, substantial powers to the select committees. Set up in the late 1970s, these committees of backbench MPs study the issues for years and invariably say the most intelligent and bold sentences uttered by any parliamentarian. Kennedy's group wants to give them far greater resources, the legal power to subpoena witnesses, and the right to scrutinise and veto government appointments.

Once we had PR and weighty select committees hanging over ministers' heads, there would be far better checks and balances in place than the current fusty House of Appointees. The solution then is not to democratise the House of Lords into national gridlock. It is to shut the place down, and leave those old red leather benches to the tourists and the history students.

j.hari@independent.co.uk