Cameron: I'll strip corrupt lords of peerages

Exclusive: Tory leader says he would show no mercy over 'cash-for-amendments' allegations

A Conservative government would change the law so that members of the House of Lords could be stripped of their peerages for breaking new anti-sleaze rules, David Cameron told The Independent yesterday.

The move came as it emerged that the four Labour peers at the centre of the "cash for amendments" allegations are expected to lose the party whip. However, no disciplinary action will be taken until after a Lords committee has investigated claims that they were prepared to take up to £120,000 to help alter legislation.

In his interview, Mr Cameron promised to bring in a raft of measures to repair what he called Britain's "broken politics". He claimed the Lords scandal was a symptom of a government that is "making decisions convenient for themselves rather than the people they are supposed to be serving".

"It is completely unacceptable behaviour; we need to make sure it is properly dealt with," said Mr Cameron, who described as "pretty chilling" the transcript of Lord Taylor of Blackburn's remarks to undercover reporters from The Sunday Times posing as businessmen offering payment for a possible law change. "It is pretty clear that this went well beyond the rules that exist," he said.

"We would change the law to make sure it is possible to suspend, exclude or expel somebody from the House of Lords who has behaved inappropriately. If there is evidence that the rules have been broken so flagrantly, action must be taken."

Mr Cameron accepted his proposed law change could not be used to expel the four Labour peers – who all deny any wrongdoing – as it could not be retrospective. Nor would it ban Lord Archer of Weston-super-Mare, the novelist and former Tory deputy chairman, who was sentenced to four years in prison for perjury and perverting the course of justice.

Mr Cameron has set up a task force to propose how peers guilty of misconduct could be excluded. It will recommend improvements to ensure "integrity and accountability"; possible sanctions; consider the impact of lobbying and "preventing undue influence and ending paid advocacy".

The Tory leader has been advised legislation would be needed to strip lords of peerages. By proposing a new law, he hopes to steal a march on Labour. He said: "The rules in the Commons are clear. This case has shown the case for reform in the Lords. It is a total anomaly that you can be barred from the Commons but not the Lords." The Tories would back a change in the rules to allow peers to be suspended if they break the rules. But Mr Cameron has been advised this would require legislation to allow peerages to be revoked. If that is not done by the election, it would be a priority for a new Tory government.

However, Mr Cameron revealed he will shelve party plans for wider reform of the Lords, which include turning it into a largely elected chamber, because of the economic crisis. Asked if he could guarantee reform would take place in his first term, he replied: "No. The priority would be mending the broken economy and broken society." But it would be a "cop out" to argue cleaning up the Lords should await wider reforms.

Labour sources insist a Lords crackdown is "under active consideration" by the Government. A proposal to remove peers if they are guilty of a serious offence, included in a White Paper on wider Lords reform, could be enacted separately, they said.

Nick Clegg, the Liberal Democrat leader, said peers found guilty of breaking rules should be thrown out of the Lords and described the second chamber as "completely out of step with modern Britain".

Research by The Independent has revealed that eight more former Labour ministers now sitting in the Lords have been paid for private consultancy work. The number of former Labour ministers on consultancies' payrolls stands at 12, after three former Labour ministers, Lord Snape, Lord Truscott of St James and Lord Moonie, were caught up in the "cash for amendments" allegations.

Last night Lady Royall, Leader of the Lords, said she would back permanent expulsion in extreme cases. In The Guardian she said tighter regulations governing consultancy work were needed alongside tougher sanctions. Sanctions could include the immediate suspension of peers under investigation, longer suspension if allegations are proven and possible "permanent exclusions in extreme cases", she said

Lord Cunningham of Felling, a minister under Tony Blair, holds two consultancy posts. He is a partner in Brinkburn Associates, a "political and public policy consultancy", and is a paid adviser to the Corporation of the City of London. Last year, a spokesman for the corporation said Lord Cunningham helped arrange meetings with ministers. He was criticised for failing to register the connection, but his work is now registered.

Baroness Jay of Paddington, a former Leader of the Lords, is paid adviser to the consultancy firm Gerson Lehrman Group. Baroness Morgan of Huyton, a former Women's minister, has been a part-time paid adviser to the financial services firm JPMorgan since 2007. Lord Irvine, Lord Chancellor under Mr Blair, holds a paid consultancy position with Hutchison Whampoa Limited, one of the world's biggest port and telecommunications operators. Lord Gilbert, a minister under three prime ministers, has four consultancy positions.

There is no suggestion of wrongdoing on the part of the ex-ministers. But the extent of consultancy work has led to calls for rules to be tightened. It comes after the revelation that Lord Taylor listed his work with Experian, a credit check firm, as one of his "non-parliamentary" consultancies, despite The Sunday Times' claims that he talked about intervening to alter legislation to the benefit of the company.