It will create a Commission to consider individuals for Life Peerages. Names could be put forward to the Commission who will assess them against criteria which will include "conspicuous merit" and "willingness and capacity" to contribute to the Lords but the Commission will be able to propose additional criteria. In making any proposal for additional criteria they will have to consider the "diversity of the population of the U.K". Any criteria must be "laid before" Parliament and could be annulled by a resolution of each House. Surely, an affirmative vote ought to be required to bring them into force? The Commission will present names to the Prime Minister who is then the only person who may recommend names to the Crown. Whether the P.M. will have any say (e.g. veto) over the names is unclear on the face of the Bill.
The Commission will have 9 members who will be nominated jointly by the Speaker of the House of Commons and the Lord Speaker of the House of Lords. There will have to be 4 members independent of political parties and there must be 4 Privy Councillors. The Bill provides for some disqualification from being a Commissioner - e.g. having made a donation to a political party within the last 2 years.
The new Commission procedure appears to remove the right of a Prime Minister to simply nominate someone for a peerage. Prime Ministers have frequently nominated new peers - e.g. upon dissolution of parliament. [See the latest list].
The Bill provides for the final phasing out of the hereditary peers who were allowed to remain under the House of Lords Act 1999. As each dies, he or she will not be replaced.
A further long overdue reform is that a peer could lose membership of the House of Lords if found guilty of and imprisoned for more than one year for a criminal offence. [The wording of the Bill on this is matter ought to clarify whether suspended sentences of imprisonment are included]. Whether Lord Steel's bill will reach the statute book must be doubtful given that the new government are setting up a committee to examine reform of the House of Lords (including election) and tasking the committee to prepare proposals by the end of 2010.