The papers this morning are dominated by one story: the Lords defeat of the government's proposed welfare cap.

An alliance of bishops, Liberal Democrat rebels, and crossbench and Labour peers voted in favour of an amendment to Iain Duncan Smith's flagship benefits cap. The Lords voted 252-237 to exclude child benefit from the £26,000 per year cap on household benefits. This marks the welfare reform bill's fifth defeat in the upper house.

In the end, the amendment was backed by Labour -- although, as my colleague George Eaton explained yesterday, this was by no means a simple position:

Somewhat confusingly, Labour doesn't actually want child benefit exempted from the cap (which it supports in principle). Rather, it is supporting the amendment as a means of getting the welfare bill back to the Commons, where a new vote can be held on its homelessness amendment.

Why the labyrinthine stance on this? Well, some of this morning's headlines might hold a clue. ""Insult to every working family," screams the Daily Mail's front page, railing against the bishops who led the revolt. The Sun also rounds on the bishops for "meddling" in politics.

The fact is, as I blogged yesterday, an overwhelming majority of the public are in favour of a cap on benefits -- support stands at 76 per cent of the public at large and 69 per cent of Labour supporters. This puts Labour in a tricky spot: as a party, it should stand up for the most vulnerable, yet it does not want to fly in the face of public opinion, hence the slightly baffling line that they support the cap "in principle, but not in practice".

This attempt to have their cake and eat it -- supporting the benefit cap (and cuts more widely) while also not supporting it -- is not having the desired effect, if this morning's polls are to be believed. A Guardian/ICM poll gives the Conservatives a five point lead over Labour (at 40 and 35, respectively) -- their highest standing since before the general election. This would place the Tories on the verge of an outright majority at a general election. It is worth noting that this substantial lead may be an outlier: both YouGov and Populus today give Labour a one point lead.

Debate over Labour's new, harder stance on the cuts has dominated the last week or so, and the ICM poll contains some interesting results on this. Asked how the tougher position affected likelihood to support Labour, 72 per cent said it made no difference one way or another. Just 10 per cent said it would make them more likely to vote Labour, while 13 per cent said it made them less likely to vote for the party. This gives the shift a net rating of minus three points.

Labour top command will doubtless say that the party's economic shift has simply not yet had time to get through to voters. Yet, as Mary Riddell argues persuasively in the Telegraph today, the problem may be more deep-seated than that:

Though pathetically slight, the curbs unveiled by Vince Cable prove that, on executive pay, the Labour leader has the Tories on the run. But Mr Miliband's failure to be equally clear about the needs, the responsibilities and the rights of those at the bottom of society has made him the victim of his own fairness campaign. The "squeezed middle", as he is learning, can and will exert a cobra grip on those further down the social heap.

...

Welfare, not wealth, may prove the defining issue of Mr Miliband's leadership. In the coming weeks, he must prove that he can wrong-foot Mr Cameron on the poor as well as on the rich. Labour, of all parties, must stand up unequivocally for those in greatest need. "Leave it to the bishops" is not an election-winning slogan.

Labour needs to start reframing the debate and conveying to the public why the cap is unfair (and looking at ways of ending benefit dependence while mitigating the negative impacts), not simply trying to benefit from public support for a policy the party is clearly uncomfortable with.