I reckon the Lords should be filled up proportionally based on the GE vote, then the parties appoint their own Lords preferably based on intelligence and expertise rather than how much they pay them. That way in theory every vote does count, yet you still keep the definitive result FPTP generally gives in the commons. As for whether it was a good thing they voted it down, I think it was just because it was a really bad, unfair policy and it needed to be done.