Could Tory rebels be unleashed on Clegg's Lords reform?

Unglamorous changes to the upper chamber could end up as a chew toy for frustrated Tory backbenchers

Of the many things a government might want to make a priority at a time of economic crisis and international instability, reforming the House of Lords is an eccentric choice.

Most of the public, it is safe to say, is uninterested in how the upper chamber works. Within the minority that understands the Lords, a still smaller number is so affronted by the lack of electoral accountability there as to want immediate constitutional redress. There is no clamour for a reform, which, as the Times reports this morning, will require protracted trench warfare between the government and recalcitrant peers, most of whom would end up at some stage facing eviction from a mostly elected legislature. Not surprisingly, a large number of ennobled turkeys are against a Bill for More Christmas.

The Times reports that a hardcore of 20 Tory peers are threatening to go on strike - sabotaging the whole legislative programme for the next parliamentary session if plans to create elected peers go ahead.

The reform is only being mooted because Nick Clegg needs - or at least feels he needs - a concrete constitutional reform in his legacy, having failed to secure a change to the electoral system. A Lords Reform Bill is planned for the Queen's speech in May to give Lib Dems some badge of institutional modernisation when, in the run-up to the next election, they draw up their balance sheet of manifesto pledges implemented and promises jettisoned in coalition. It would, in any case, be a purely symbolic victory for the party faithful. No-one seriously thinks the creation of an elected second chamber will earn the instant gratitude of tens of millions of citizens.

But from where the Lib Dems are standing, even modest trophies are better than none. Can they even secure that much? The prospect of a fierce rebellion among peers is certainly a problem, not least because it plays to fears among Conservative MPs in the Commons that the whole issue is about to snarl up the legislative works. This objection surfaced just before the parliamentary recess in Deputy Prime Minister's Questions (the mostly unwatched monthly cousin to the headline-grabbing weekly PMQs session). Back bench Tories have been pestering Clegg on the question of why, when the economy is plainly the issue that must take precedence, he seems determined to waste everyone's time (as they see it) with a reform that is, at best, half baked. It isn't yet clear what powers the elected peers would have relative to their unelected bench-fellows and how their relationship with the Commons would change.

One prospect that worries senior Lib Dems is that David Cameron's relations with his own backbenchers will get testier as time goes on. The warm glow of Tory admiration for the PM's European (non) veto in December has already worn off and there is increasing irritation with the number of concessions perceived to be granted to keep Clegg's party happy. At some point, Cameron will have to find some pressure valve to enable his party's rebellious rank and file to express its fury. What better mechanism than a vote on Lords reform? It is an issue on which most people would expect the Conservative party to take a conservative view and that will animate few passions outside Westminster.

Downing Street could never be seen actively to encourage a rebellion against a government Bill, but Cameron could decide how ruthlessly he wants to whip his MPs in favour. As one Lib Dem close to Clegg put it to me recently, Lords reform could be used as "the bit of the garden where it is safe to let them off the leash for a bit." Essentially, Cameron would put on a show of trying to help Clegg get his reform but would not invest too much of his own political capital in forcing it through an unhappy Commons.

Meanwhile, Labour's position is still officially to like the idea of Lords reform in principle but to sneer at Clegg's plan of an 80% elected chamber as not ambitious enough, although in reality this is high-minded cover for wanting to retain the option of making the Lib Dem leader squirm. So a half-decent Tory rebellion could see Lords Reform defeated in the Commons. The whole thing has the makings of a disaster for Clegg - another "miserable compromise" on a constitutional change that no-one can get very excited about, sabotaged by Tories itching to rein in Lib Dem influence and a Labour party disinclined to ride to the rescue.

Rafael Behr is political columnist at the Guardian and former political editor of the New Statesman

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Scotland's vast deficit remains an obstacle to independence

Though the country's financial position has improved, independence would still risk severe austerity. 

For the SNP, the annual Scottish public spending figures bring good and bad news. The good news, such as it is, is that Scotland's deficit fell by £1.3bn in 2016/17. The bad news is that it remains £13.3bn or 8.3 per cent of GDP – three times the UK figure of 2.4 per cent (£46.2bn) and vastly higher than the white paper's worst case scenario of £5.5bn. 

These figures, it's important to note, include Scotland's geographic share of North Sea oil and gas revenue. The "oil bonus" that the SNP once boasted of has withered since the collapse in commodity prices. Though revenue rose from £56m the previous year to £208m, this remains a fraction of the £8bn recorded in 2011/12. Total public sector revenue was £312 per person below the UK average, while expenditure was £1,437 higher. Though the SNP is playing down the figures as "a snapshot", the white paper unambiguously stated: "GERS [Government Expenditure and Revenue Scotland] is the authoritative publication on Scotland’s public finances". 

As before, Nicola Sturgeon has warned of the threat posed by Brexit to the Scottish economy. But the country's black hole means the risks of independence remain immense. As a new state, Scotland would be forced to pay a premium on its debt, resulting in an even greater fiscal gap. Were it to use the pound without permission, with no independent central bank and no lender of last resort, borrowing costs would rise still further. To offset a Greek-style crisis, Scotland would be forced to impose dramatic austerity. 

Sturgeon is undoubtedly right to warn of the risks of Brexit (particularly of the "hard" variety). But for a large number of Scots, this is merely cause to avoid the added turmoil of independence. Though eventual EU membership would benefit Scotland, its UK trade is worth four times as much as that with Europe. 

Of course, for a true nationalist, economics is irrelevant. Independence is a good in itself and sovereignty always trumps prosperity (a point on which Scottish nationalists align with English Brexiteers). But if Scotland is to ever depart the UK, the SNP will need to win over pragmatists, too. In that quest, Scotland's deficit remains a vast obstacle. 

George Eaton is political editor of the New Statesman.