Death of Lords Reform: defeat or ‘breach of contract’?

Relations within the coalition grew significantly worse today, with Conservative sources in Whitehall admitting defeat on the coalition’s plans for Lords reform.

I understand David Cameron is expected to make an announcement early next week, Tuesday or Wednesday perhaps.

Liberal Democrat figures in Whitehall acknowledge the Lords bill is now lost, but reacted today by saying for the first time that this is a “breach of contract”.

The contract in question is the May 2010 coalition agreement, and one Liberal Democrat close to Nick Clegg has even compared the situation to G4S and the Olympics, as the Conservatives accept there isn’t enough support on their backbenches to get the Lords Bill through the Commons.

This is the first time that “contract” will have been broken by either side, another Lib Dem source told me.

Senior Liberal Democrat figures are now admitting that boundary changes, which benefit the Conservatives, are likely to be opposed by the Liberal Democrats as the Conservatives’ “penalty payment” for what they see as their failure to honour the coalition contract.

The strength of language being used by the Nick Clegg camp, and anger towards their Tory partners, seems to have increased significantly today.

Indeed the former Lib Dem chief executive, Lord (Chris) Rennard told the Guardian today that “if the Lords is not to be given more legitimacy, then the case for reducing the number of MPs …. will also be weakened.”

Part of the thinking behind reducing the number of MPs – which is officially Lib Dem policy too – is that there would be a big extra elected contingent at Westminster in a reformed upper house.

But Conservative sources point out that boundary changes were specifically linked to the referendum on AV in the Caolition Agreement, implying that having had the AV referendum, it would be a breach by the Lib Dems if they reneged on the other side of the sub-contract.

David Cameron spoke a few weeks ago of “one last go” at a compromise package on the Lords Bill involving “a smaller elected element” (smaller than the 80 per cent currently proposed).

But it is now clear that “one last go” has now failed, and senior ministers may as well admit as much before they off on their post-Olympic holidays.

It is obvious that most Tory rebels are implacably opposed to any form of direct election to the upper house, whether five cent or 80 per cent.

The rebel leader Jesse Norman has held talks with the David Cameron’s point-man on this issue, Oliver Letwin, but with little progress. 57 of the rebels signed a letter to David Cameron and the Chief Whip Patrick MacLoughlin a couple of weeks ago suggesting possible compromise measures which don’t involve direct election, such as abolishing the remaining 92 hereditary peers; reducing the numbers in the upper chamber; and introducing new measures to disqualify peers with serious criminal convictions, such as Jeffrey Archer.

You may have have noticed I used the term “direct election” twice in the last two paragraphs, for the rebels have also come up with a compromise proposal for INDIRECT elections of peers to replace the 92 hereditaries. This might involve inviting prominent public bodies such as the Royal College of Nursing, trades unions, and business organisations to elect new peers from among their members.

It is now accepted that no compromise is possible which would be acceptable to both Liberal Democrats and most of the the 91 Conservative rebels.

And even if such a compromise had been found, the danger for ministers would have been that any significant dilution of the 80 per cent directly elected element in the reformed second chamber would probably have lost the support which Labour gave the Lords Bill at second reading (on the bill itself rather than the proposed timetable).

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