Lord Lipsey: Elected House of Lords could cost £484m

The government wants a reformed second chamber with 80% of members elected and 20% appointed

A democratically elected House of Lords could cost £484m, according to Labour economist Lord Lipsey.

The peer says proposals to have elected members of the second chamber could make it five times more expensive than running costs over the past five years.

When questioned, Lord Strathclyde, Leader of the House of Lords, declined to set out the government's assessment of the cost.

But the Cabinet Office said it would not be as high as Lord Lipsey claimed.

A spokesman said: "Until we bring forward legislation detailing our final proposals, it is impossible to produce an accurate cost estimate."

Its projected costs will be outlined in legislation before Parliament's summer recess, he said.

'Flawed assumptions'

"It would be wrong to assume that reforming the House of Lords will necessarily be an enormously expensive enterprise.

"Part of the purpose of reform is, of course, to reduce significantly the size of the House.

"The cost forecasts that Lord Lipsey has made include some flawed assumptions about the cost of the Joint Committee's recommendations.

"The costs of the proposals we bring forward are unlikely to be anywhere near so high - for example, the government does not support a referendum on Lords reform."

The coalition has suggested cutting the number of peers to 300, from more than 800, with 240 members elected and 60 appointed.

If legislation is passed, the first elections would take place in 2015.

But the proposals are controversial, with some MPs and peers arguing that constitutional change should not be a priority at a time of economic crisis, and also saying that altering the Lords could undermine the primacy of the Commons.

Lord Lipsey - a member of a cross-party group opposed to an elected House of Lords - believes changes would come at too high a price in an age of spending cuts.

He said: "Nick Clegg's priority is to lavish many millions of the taxpayer's money on a new gang of elected politicians. I doubt if the British public will share his view."

'Gross waste'

The peer says the cost of having elected members, paid a salary and office costs, plus the cost of the elections could make a reformed second chamber cost £484m over five years.

This, he claims, is more than five times the corresponding running cost of the Lords for the past five years, which was £91m.

The government says Lord Lipsey may have over-estimated the costs.

He made his calculations based on there being 450 members of a new upper chamber or senate, 150 more than initially proposed by the government.

And the figures include £102m towards a referendum on Lords reform, which Labour has said it wants but which is not government policy.

Liberal Democrat peer Lord Lee called the policy a "gross waste of public money".

Conservative MP Jesse Norman, speaking for the Campaign for an Effective Second Chamber of which Lord Lipsey is a member, said: "At a time of national austerity, it is hard to imagine how the government can justify spending nearly £500m of taxpayers' money on what would be an unprecedented constitutional upheaval.

"All the key reforms can be made without having to have an elected Lords."