House of Lords reform has become a hot button issue that risks widening divisions within the coalition. On one side we have the Liberal Democrats, who historically have considered it their raison d’etre to enact constitutional reform to democratise the British political system. On the other side are many Conservatives, who argue that democratising the Lords will lead to a weakening of the chamber’s ability to review and revise legislation.

Constitutional reform is an area where free marketeers can often find themselves on every side of the issue being debated – look no further than the debate over the Alternative Vote last year. Many are strongly opposed to any constitutional tinkering, while others are split on the way to reform the Lords.

Some, mostly in the United States, prefer the indirect election method used in the pre-1913 United States Senate or German Bundesrat. For example, Daniel Hannan and Douglas Carswell support a system of seconded county and city Councillors. Others back an elected senate either on a regional basis or different voting system. Hayek argued for a scheme similar to a citizens’ jury, where people were chosen by lots under a complicated system to represent each age cohort, similar to the system of Athens (in her days of comparative fiscal stability). However, the first step is to decide the proper role of the second chamber. How can a second chamber be created that avoids Abbe Sieyès’ dismissal of bicameralism, ‘if a second chamber dissents from the first, it is mischievous; if it agrees it is superfluous’?

The House of Lords has been, for the past hundred years, a chamber able (and willing) to delay but not frustrate the will of the popularly elected Commons. It has had a checkered career since the enacting of the Parliament Act, sometimes standing up to attempts to infringe on liberty (such as 42-day detention legislation), sometimes voting to prevent liberties being extended (such as the refusal of the Lords to back the repeal of Section 28) and all too often waving through legislation without sufficient review or revision (such as with Labour’s nationalisations in the aftermath of World War 2). But before embracing change (of whatever kind) it is necessary to decide whether the second chamber should move from this limited role to something more.

To go back to Hayek’s thesis, he argued for a radical new constitution that would divide the functions of government (administrative and legislative) between the two houses. The upper house, made up of this citizen’s council, would decide general, non-discriminatory rules, which the lower house would then apply. This would, he argued, avoid democracy turning into a system that primarily exists to pay off special interests.

But for those who would prefer less radical reform, the question that must be asked is: do we want a chamber that will continue to be confined to the role of delaying but not frustrating? And is it likely that a reformed, directly elected second chamber will be contented with this limited role in the future?

Examples from overseas show that competing democratic mandates can evolve from having two democratically elected chambers. In Australia, the privatisation of Telstra (the then-national Australian telecom) was held up for six years due to these competing mandates. The Australian Liberal/National Coalition won three majority governments (elected through the Alternative Vote) on a mandate to sell Telstra. Each time they were stymied in the Senate (elected under Single Transferable Vote) in which the Australian Democrats held the balance of power – a party who ran on a mandate not to sell Telstra. In the United States we see constant battles between the two houses on budgets and legislation.

Neither of these options is necessarily a bad thing. For many on the free-market right (especially in the US) the point of bicameralism is to prevent the government from doing things and to make sure that different voices are heard and are part of policy development and decision making. These issues require detailed scrutiny. There must be more to the debate than simply demanding reform for its own sake.