David Cameron and Nick Clegg were forced into a humiliating last-minute retreat last night to head off a defeat over plans for an elected House of Lords. The Prime Minister and his deputy blinked first in a stand-off with more than 100 rebel Conservative MPs who oppose Mr Clegg’s flagship reform of the second chamber, cancelling the critical second vote in the Commons.
The Tory rebels believe their symbolic victory means they will be able to prevent the measure making progress. After a dramatic day, the Bill was given a second reading by 462 to 124 last night – a Government majority of 338. In the biggest Tory rebellion since the last election, 91 Tories voted against the measure and an estimated 50 abstained – a sign of the trouble that lies ahead. Some 26 Labour MPs opposed the Bill.
Conor Burns resigned as a parliamentary aide to join the revolt and Angie Bray, another ministerial aide, was sacked for opposing the Bill. She said: “What we have got here is a capitulation. The Government whips have blinked first.”
In a final attempt to salvage some reforms of the Lords, Mr Cameron and Mr Clegg will put pressure on Labour to support them in a crunch Commons vote in the autumn. But there is little sign the Opposition will rescue the Coalition from its turmoil over the Bill and Labour may opt to prolong the Government’s agony.
An alliance between the Opposition and rebel Tories meant the Coalition faced certain defeat last night on a timetable motion to prevent opponents talking the Bill out by making marathon speeches.
Tory whips predicted the Coalition Government would suffer its first defeat by a margin of between 20 and 30 votes. Mr Cameron decided yesterday morning that delaying this critical vote until the autumn was the lesser of two evils. A reluctant Mr Clegg eventually agreed yesterday afternoon.
The Tory and Liberal Democrat leaders appear divided over the way forward. Mr Cameron intends to water down the Bill by the autumn to try to win over some of the Tory opponents.
That could include scrapping plans for peers to be elected under proportional representation to serve 15-year terms without facing the voters again. Another option would be stronger safeguards to prevent the second chamber challenging the supremacy of the Commons.
But Clegg aides insisted he would fight to preserve the current Bill and declared that it is “still alive” after what they called a “tactical retreat”.
Senior Liberal Democrats renewed their threat to block Tory proposals if Mr Cameron fails to force his MPs into line. David Laws, the former Cabinet minister, said there could be “serious consequences”, adding: “The important thing in coalition is that when you enter into these promises to each other you’ve got to keep them.” Asked whether Mr Clegg blamed the Tories or Labour, his spokesman replied: “A plague on both their houses.”
Although Mr Cameron was outgunned by his own backbenchers, last night’s U-turn will be seen as a more severe setback for Mr Clegg, who hoped to win the 100-year battle to reform the Lords as part of his legacy. His prospects of securing historic change are less likely and he may have to settle for a much-diluted Bill.
Tory rebels hope the outcome will be a minimalist Bill which reduces the number of peers, removes the remaining 92 hereditary peers and ends patronage by having members appointed by an independent commission. They want to kill Mr Clegg’s plan for 80 per cent of the members to be elected and now sense blood.
While ministers blamed their climbdown on Labour’s decision to “play politics” with the issue, triumphant Tory rebels claimed the victory was theirs.
Jesse Norman, a normally loyal Cameron ally who was confronted by Tory whips in angry scenes last night after he led the revolt, said: “The Bill is a dead duck. The question is how long will the Government go on before it recognises that.”
Lord Oakeshott, a Liberal Democrat peer, said: “This is now a real test of leadership for all three party leaders. Nick Clegg must hold his nerve. David Cameron must not cringe to the Tory dinosaurs now they have tasted blood. Most important of all, Ed Miliband must show he is a real reformer.”
A Labour source said: “We will not be the blockers. We will help the Bill reach the Lords when the time is right.”
Hapless Nick Clegg may be in danger of another kick in the teeth from the Tories tomorrow evening as the possibility looms of defeat in the vote on the coalition’s timetable for its House of Lords reform Bill.
Following on from the debacle of the referendum on the AV (alternative vote) mode of balloting, it would indicate that the Tories had again outsmarted their coalition helpers.
David Cameron knew that his party’s MPs would not wear either a change in voting arrangements or the introduction of a partly elected second house.
He went along with the idea of a referendum on the first and a parliamentary Bill on the second to win Liberal Democrat support for the issues he prioritised – the economic and political changes designed to transfer wealth from the poor to the rich and to further restrict working-class capacity to resist them.
Clegg was distraught on seeing Cameron, having agreed the AV referendum, come out all guns blazing to shoot the proposed change down.
The PM is not quite so blatant this time round, insisting that his administration remains committed to the 80 per cent elected House of Lords position.
But the readiness of so many Tory MPs, including parliamentary private secretaries and serial loyalists, to declare that they will oppose the timetable, which limits line-by-line scrutiny to 10 days, and poses the possibility of its being scuppered has raised suspicions in Westminster.
If opponents of change have been given a nod and a wink by the whips that back-bench rebellion will not attract the usual dressing down and loss of promotion prospects, this will encourage Tory MPs to act in time-honoured fashion to proposals for change by digging in their heels.
Liberal Democrats are trying to talk tough by suggesting that a further dirty trick would mark a “highly significant moment” for the coalition government.
Such a phrase in normal times would indicate the hint of an ultimatum that ongoing co-operation would depend on Cameron playing a straight bat and fighting with all means at his prime ministerial disposal, including threats of disciplinary action, to win the parliamentary vote.
But these are not normal times. Such is the sense of betrayal felt by millions of voters who plumped for the Liberal Democrats in the 2010 general election, that Clegg and his inner circle know that an election in the near future would see their party annihilated.
Even if this shoddy so-called reform bites the dust, the Liberal Democrat leader will have no alternative but to continue propping up Cameron while having nothing to show to supporters of his party’s long-held commitment to constitutional reform.
And shoddy certainly sums up this measure, which is a halfway house between patronage and democracy.
I suspect there are many voters has never accepted the need for a second house, believing that the only useful role played by the House of Lords – legislative oversight and revision – could best be provided by specialist Commons back-bench committees.
But if there has to be an upper house, it must be subject to the popular will. It must be directly elected.
Conservative politicians of whatever party have always felt happier dealing with privilege and patronage, but how can the self-styled mother of parliaments think it appropriate in the early 21st century to deny voters the right to choose all those who make the laws that govern them?
Instead of the coalition using their energy to bring about reform in the House of Lords they should be hitting Barclays where it hurts by sending a clear message to Barclays boss Bob Diamond walked out of his job at £40,000 a footstep, it was revealed today, a week after he quit amid a rate-rigging scandal.
Mr Diamond – who has already raked in millions as a high-flying banker – is expected to receive £2 million after deciding to forego a potential £20m in bonuses and share awards.
So when he walked out – with immediate effect – of Barclays’ headquarters in Canary Wharf he took the lift from his 31st-floor office and made £40,000 a stride as he went 50 metres to the door.
He has agreed to take up to 12 months’ salary, his pension allowance and other benefits, the bank said in a statement, which works out to around £2m.
Unreality also extended to the world of No 10.
Asked about Mr Diamond’s pay-off, Prime Minister David Cameron’s official spokesman said: “This is a decision for Bob Diamond and for the board of Barclays.
“I think the decision to forgo the bonus is a sign that they understand public concerns and that they understand that there is a need for a change in the culture of banks.”
Barclays chairman Marcus Agius told the Treasury select committee that Mr Diamond had voluntarily decided to forego any deferred consideration and any deferred bonuses worth up to £20m.
Both resigned last week over revelations that Barclays traders attempted to manipulate the key inter-bank lending rate Libor, but Mr Agius is staying on to lead the search for Mr Diamond’s replacement.
The bank was fined £290m for attempting to fix Libor.
Mr Agius said the board “welcomed” the move by Mr Diamond to forgo his long-term bonus incentives.
He added: “The board deeply regrets the circumstances that led to Bob resigning his positions at Barclays.”
It is thought Barclays remains in talks with Mr Diamond’s right-hand man, chief operating officer Jerry del Missier, over his pay-off. He quit the same day as Mr Diamond.