An ermine-cloaked rotten borough: the bizarre by-election in the House of Lords

Westminster-watchers may be focusing on the Eastleigh by-election at the moment, but there’s been another one a bit closer to home.

While the soul-searching eyes of the nation’s political gurus are glued to the upcoming twists and turns of the upcoming Eastleigh by-election and which candidate said what and when, another parliamentary by-election has slipped lightly under the radar with rather less scrutiny.

In this other parliamentary by-election there were rather more candidates than there are in Eastleigh, an impressive 27. Turnout was very high indeed, at 96 per cent (undoubtedly a higher percentage than Eastleigh), with a majestic 46 out of the 48 eligible voters turning up to place their ballot, under strict parliamentary conditions.

Forty six voters for a parliamentary seat? How can that be? How indeed, given that we are here in the twenty-first century, and parliamentary seats usually have a rather larger electorate. Even 46,000 would be on the low side.

This other by-election was an entirely legitimate election to membership of the second house, the House of Lords, in modern-day Britain, with its own rules and regulations laid down in detail.

Here’s a riveting snippet:

In order to be elected, the successful candidate must receive at least as many votes as all the other candidates put together. In the event of this not happening after first preference votes have been allocated, the votes of the candidate receiving the lowest number of first-preference votes will be shared out according to the second preference marked on them. This will be repeated until one candidate has at least half of the total number of votes (excluding any eliminated because all preferences have been exhausted).

What has happened, without many of us noticing, is the election of a hereditary peer to the House of Lords (in this case a Conservative peer), following the rather byzantine rules created by Labour’s half-hearted attempt to reform the House of Lords some years ago, without managing to finish the job very sensibly. What we are left with is a second House with a mixture of elected and appointed peers. So those who are now elected, were once those who inherited, while those who were never likely to inherit, must wait to be appointed. Clear so far?

So therefore, if one of the 92 hereditary peers dies, a seat becomes available, but is only open to those who could have previously inherited a seat (or their successors), and are of the same party as the member who has just died. So in this case, the member of the House of Lords who died was Earl Ferrers, so those eligible to vote had to be members of the House of the Lords who are Conservative hereditary peers. While those able to stand for office were a small, but exclusive, set who were previously Conservative hereditary peers (or their children) and fancy a bit of a go at getting back in.

In case you were on the edge of your armchair, dying to know this by-election result: the newly elected member of the House of Lords is Viscount Ridley (He got 24 of the 46 votes).

And for those who were thinking this feels a bit reminiscent of something you remember vaguely from your school history lessons... You might be thinking of rotten boroughs, where tiny number of voters had the power to elect members of parliament, but these were abolished in 1832 by the Reform Act. An election-themed episode of BBC TV’s Blackadder called “Dish and Dishonesty”, where there was just one voter plus a dachshund called Colin, dramatically conveyed the idiocies and madnesses of historical elections, so we could see just how far we have come.

Nothing funny there then.

Twenty-seven hereditary Conservative peers faced off to get a seat in the House of Lords. Photograph: Getty Images
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BHS is Theresa May’s big chance to reform capitalism – she’d better take it

Almost everyone is disgusted by the tale of BHS. 

Back in 2013, Theresa May gave a speech that might yet prove significant. In it, she declared: “Believing in free markets doesn’t mean we believe that anything goes.”

Capitalism wasn’t perfect, she continued: 

“Where it’s manifestly failing, where it’s losing public support, where it’s not helping to provide opportunity for all, we have to reform it.”

Three years on and just days into her premiership, May has the chance to be a reformist, thanks to one hell of an example of failing capitalism – BHS. 

The report from the Work and Pensions select committee was damning. Philip Green, the business tycoon, bought BHS and took more out than he put in. In a difficult environment, and without new investment, it began to bleed money. Green’s prize became a liability, and by 2014 he was desperate to get rid of it. He found a willing buyer, Paul Sutton, but the buyer had previously been convicted of fraud. So he sold it to Sutton’s former driver instead, for a quid. Yes, you read that right. He sold it to a crook’s driver for a quid.

This might all sound like a ludicrous but entertaining deal, if it wasn’t for the thousands of hapless BHS workers involved. One year later, the business collapsed, along with their job prospects. Not only that, but Green’s lack of attention to the pension fund meant their dreams of a comfortable retirement were now in jeopardy. 

The report called BHS “the unacceptable face of capitalism”. It concluded: 

"The truth is that a large proportion of those who have got rich or richer off the back of BHS are to blame. Sir Philip Green, Dominic Chappell and their respective directors, advisers and hangers-on are all culpable. 

“The tragedy is that those who have lost out are the ordinary employees and pensioners.”

May appears to agree. Her spokeswoman told journalists the PM would “look carefully” at policies to tackle “corporate irresponsibility”. 

She should take the opportunity.

Attempts to reshape capitalism are almost always blunted in practice. Corporations can make threats of their own. Think of Google’s sweetheart tax deals, banks’ excessive pay. Each time politicians tried to clamp down, there were threats of moving overseas. If the economy weakens in response to Brexit, the power to call the shots should tip more towards these companies. 

But this time, there will be few defenders of the BHS approach.

Firstly, the report's revelations about corporate governance damage many well-known brands, which are tarnished by association. Financial services firms will be just as keen as the public to avoid another BHS. Simon Walker, director general of the Institute of Directors, said that the circumstances of the collapse of BHS were “a blight on the reputation of British business”.

Secondly, the pensions issue will not go away. Neglected by Green until it was too late, the £571m hole in the BHS pension finances is extreme. But Tom McPhail from pensions firm Hargreaves Lansdown has warned there are thousands of other defined benefit schemes struggling with deficits. In the light of BHS, May has an opportunity to take an otherwise dusty issue – protections for workplace pensions - and place it top of the agenda. 

Thirdly, the BHS scandal is wreathed in the kind of opaque company structures loathed by voters on the left and right alike. The report found the Green family used private, offshore companies to direct the flow of money away from BHS, which made it in turn hard to investigate. The report stated: “These arrangements were designed to reduce tax bills. They have also had the effect of reducing levels of corporate transparency.”

BHS may have failed as a company, but its demise has succeeded in uniting the left and right. Trade unionists want more protection for workers; City boys are worried about their reputation; patriots mourn the death of a proud British company. May has a mandate to clean up capitalism - she should seize it.