THE reputation of the House of Lords is hardly riding high.

It is easy to denounce this expensive anachronism, which many see as unjustifiable in the modern world. It entrenches privilege: in terms of class, gender and, thanks to the inclusion of Church of England bishops, religion. In the aftermath of a failed reform bill, which promised but did not deliver a proportionally elected second chamber, many will want to let the issue lie. So the Prime Minister's recent decision to appoint 100 new peers, sparking a new round in the century-long game of "fixing the House of Lords", seems particularly ill-judged.

We may expect this new batch of ermine-clad placemen to contain many "faithful" and "generous" Tory worthies (ie, party hacks and big donors), whose duty, in return for their privileges, will be to ensure the uninterrupted passage of Government bills. Nevertheless, careful observers might see more at work here than just the usual jobbery. Since the removal of most of the hereditary backwoodsmen in 1999, the House of Lords has ceased to be an aristocratic bastion of the landed interest, and has sought to make its reputation as a revising chamber of the "great and good", consisting of highly distinguished persons representing the breadth and depth of achievement in public life.

Loading article content

Fulminating against the apparently indefensible absurdities of the House of Lords might be good sport, but this ignores the fact that the standard of debate can be very high, and that although the chamber's effect on legislation is often marginal (since it is at the mercy of the Commons), it is usually benign. At its best, the legitimacy of the Lords rests on a sort of meritocracy, and on the confidence that the public has in the quality, not the partisanship, of peers.

Partisan appointments are, of course, nothing new. Kings and then prime ministers have used peerages to reward loyalty as much as merit – and, on occasion, to put the disloyal or incompetent graciously out of harm's way. The Liberal prime minister David Lloyd George was said to have turned the awarding of peerages into a lucrative trade. Yet David Cameron's en masse appointments mark a subtle but profound change in the nature of the House of Lords. In creating such a large batch of peers with the declared aim of "rebalancing" the Lords, he is remodelling the institution according to different principles of legitimacy. In an age that struggles to distinguish between excellence and popularity, the new standard hinted at by Cameron is that the Lords should reflect the partisan balance of the Commons.

This is not meritocracy, but a sort of degraded, second-hand democracy by proxy, whereby the Prime Minister is always assured a safe working majority in both houses. It has all the disadvantages of the closed party-list electoral system, without even the redeeming feature of allowing the public to vote for the party of their choice; we can be sure that, compared to a proportionately elected chamber, there will be precious few peers from minor parties, and no hope of a balance of power capable of retraining the waywardness of a majority in the Commons.

More profoundly, these developments indicate the slow erosion of UK institutions. The British state, having become untenable in its unreformed (pre-Blair) form, is still incapable of truly reconstituting itself as a democratic and federal state with a modern written constitution. Through piecemeal tinkering, it has morphed into a dysfunctional hybrid, without any internal logic or animating principle to sustain it. British institutions are

tenuously held together by the cobwebs and the glitter: royal weddings and Olympic Games are poor substitutes for a fair electoral system, civil liberties and open government.

The debate over the reform of the House of Lords revealed the limits of this tinkering approach. Politicians argued over the composition of the Lords, but rarely paused to consider the institutions of government systematically. They did not think about the purposes of a second chamber, whether a second chamber is needed, or how the parts of a new constitutional system were to fit together.

In the end, the reform was thwarted by a backbench Tory rebellion, but behind the Coalition's internal tensions was a barely recognised and poorly articulated difference of fundamental principle between those committed to the supremacy of the Commons, who saw a reformed second chamber as a convenient tool of the Government for the better ruling of the people, and those who saw it as a tool by which people might better control the Government. In the Tory view, the Lords was supposed to retain its character as a senatorial body, a "chamber of wise elders", promoting a more informed, detailed and mature scrutiny of legislation and policies. But some Liberal Democrat reformers hoped to see it transformed into a tribunate, representing the people and perhaps allowing smaller parties to restrain the excesses of the Government's well-whipped majority. The obvious incompatibility between these principles need not necessarily have made reform impossible, if we had a constitutional culture that enabled rational discussion. In the bodge job, make-do-and-mend culture of Westminster and Whitehall, however, that discussion did not, and could not, take place.

A very different situation prevails in Scotland, where independence would provide the chance to devise constitutional arrangements suitable for a 21st-century democracy rather than an 18th-century monarchy. The Deputy First Minister has confirmed the way ahead: an interim constitution, maintaining basic rights and democratic principles, will carry us through a transition period, until the people, through a participatory process, can adopt a Scottish constitution for our nation's future. Public meetings, sponsored by organisations such as the Constitutional Commission and the Electoral Reform Society (Scotland), have confirmed that there is considerable public enthusiasm to engage in this process. Unlike in Westminster, there is an appetite to proceed rationally and systematically, to start by laying down principles and values before progressing to institutional forms.

Would an independent Scotland need a second chamber? It depends on what sort of democracy we want to live in, and what we want the relationship between the people and their government to be. If we want a Westminster-style, low-quality democracy, with the unfettered rule of the majority party and effective power concentrated in the hands of the Prime Minister, then we would have no need of a second chamber. If, however, we wish to create a more consensual democracy, in which power is more widely shared and no single party or personality is able to dominate the state, a second chamber might help achieve those ends.

Certainly, the functions of expert scrutiny and review, wider representation of the diverse interests in society, and checks on the abuse of majority power, would need to be fulfilled. However, a second chamber is not the only way of fulfilling them. Many of the world's highest quality democracies, according to The Economist's Democracy Index – including Iceland, Denmark, Sweden and Luxembourg – have only one chamber, and make use of ancillary mechanisms of scrutiny, representation, deliberation, rights-protection, and popular restraint of majority power.

In Denmark, for example, one-third of the members of parliament can, with certain exceptions, demand a referendum on bills that have been passed by parliament. This mechanism enlists the parliamentary minority as a check against the majority, with the people as the ultimate arbiter between them. Perhaps unexpectedly, this does not lead to "a referendum a week" – in fact, no referendum has been held under this rule since 1963. Instead, the knowledge that a referendum could be invoked, and the desire of both the government and opposition to avoid having their bluff called, encourages both sides to work together: the opposition has an incentive to be constructive, the government to take constructive criticism on board.

In Iceland, the popularly elected president, who is for most part a non-executive figurehead, has certain reserve powers under the constitution that enable him or her to act as a protector of the public interest, referring legislation passed by parliament to the people. The current president has used this power twice, referring unpopular bank bailout legislation to the people. Thanks to this constitutional provision, Iceland is the only country to have dealt justly with the financial crisis; it has prevented the transfer of private losses to the public treasury, and has avoided the harsh austerity imposed on Greece and Spain.

A Swedish substitute for a second chamber is the law council. Although consisting of members of the senior judiciary, it has a wider remit than a court: it considers not only the constitutionality of proposed laws, but also their coherence, compatibility with other laws, relationship to the legal system in general, and practical applicability. The law council must be consulted before decisions are taken on constitutional amendments, or laws relating to broadcasting, open government, civil rights and administrative law. Its advice may be overridden by parliament since it is, ultimately, a consultative and not a legislative institution. Nevertheless, given the law council's moral authority, flagrantly ignoring its advice would generally be politically unthinkable, and would be interpreted as a breach of the spirit, if not the letter, of the constitution.

Sweden also provides for commissions of inquiry, which play an important role in the drafting of laws and in the elaboration of public policies. Commissions of inquiry – which are very different from our post-hoc inquiries, but have some similarities to a royal commission – are formally appointed by the government, and often include academics, administrators and other experts, as well as members of parliament from both sides of the house. These members thereby have the opportunity to influence policy and legislation at the early stages, enabling rational, informed arguments to be heard, and consensus to emerge, before the party-political battle-lines harden.

The political scientist Dr Donald Shell, in a recent lecture in Glasgow, made a compelling case for a Scottish senate. Such an institution, with a mixture of appointed, ex-officio and indirectly elected members, and powers at least equivalent to those of the House of Lords, would combine the functions of expertise provision, interest representation and majority-restraint in one body. Nevertheless, as these brief examples show, a second chamber is not the only option: effective committees, a minority veto referendum procedure, the judicial review of the constitutionality of legislation, and an institutionalised consultation process may do just as well – and may offer a simpler, cheaper, more efficient and better quality, democracy.

Of course, none of this could happen without independence. But that raises another question: if the UK is no more, and if the House of Lords is to continue as the parliament of England, Wales and Northern Ireland, what is to become of peers from Scotland? A definitive answer is impossible, since this is one of the many details that must be settled on a statutory basis during the transition process. If precedents from Irish independence 90 years ago were to be followed, then Scottish peers (ie, those holding a title from the Scots Crown granted before 1707), would presumably forfeit their rights. In the case of UK peers (those whose peerages were created after the Union), such as Lord McConnell or Lord Wallace, one solution is to make citizenship the determinant: holders of a UK life or hereditary peerage who accept Scottish citizenship would lose parliamentary privileges; conversely, those who choose to keep their Lords seat and stay in Westminster would forfeit any claim to Scottish citizenship.

Whether peers in an independent Scotland would retain their titles (as distinct from their seats in the Lords) is, again, a matter to be decided by the constitution or laws of a post-independence state. Neil MacCormick's 2002 draft of a Scottish constitution – the last one to have been formally endorsed as SNP policy (although it must now be seen as a historical document rather than a precise statement of current constitutional policy) – made no mention of titles, so presumably they would have been retained, unless subsequently abolished by statute. It would even have theoretically allowed for the restoration of a Scottish peerage, to be created by the Queen of Scots on the advice of the Prime Minister of Scotland.

This would, however, be unthinkable. The case for independence is thin if we do not make use of the opportunity to make long-overdue reforms, such as the abolition of noble ranks. Given a choice between the gaudy rank of "marquis" or "duke" and the honourable title of "citizen", surely those whose civic and democratic virtues truly ennoble them will always choose the latter.