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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What type of Brexit did we vote for? 150,000 Conservative members will decide

As Michael Gove launches his leadership bid, what Leave looks like will be decided by Conservative activists.

Why did 17 million people vote to the leave the European Union, and what did they want? That’s the question that will shape the direction of British politics and economics for the next half-century, perhaps longer.

Vote Leave triumphed in part because they fought a campaign that combined ruthless precision about what the European Union would do – the illusory £350m a week that could be clawed back with a Brexit vote, the imagined 75 million Turks who would rock up to Britain in the days after a Remain vote – with calculated ambiguity about what exit would look like.

Now that ambiguity will be clarified – by just 150,000 people.

 That’s part of why the initial Brexit losses on the stock market have been clawed back – there is still some expectation that we may end up with a more diluted version of a Leave vote than the version offered by Vote Leave. Within the Treasury, the expectation is that the initial “Brexit shock” has been pushed back until the last quarter of the year, when the election of a new Conservative leader will give markets an idea of what to expect.  

Michael Gove, who kicked off his surprise bid today, is running as the “full-fat” version offered by Vote Leave: exit from not just the European Union but from the single market, a cash bounty for Britain’s public services, more investment in science and education. Make Britain great again!

Although my reading of the Conservative parliamentary party is that Gove’s chances of getting to the top two are receding, with Andrea Leadsom the likely beneficiary. She, too, will offer something close to the unadulterated version of exit that Gove is running on. That is the version that is making officials in Whitehall and the Bank of England most nervous, as they expect it means exit on World Trade Organisation terms, followed by lengthy and severe recession.

Elsewhere, both Stephen Crabb and Theresa May, who supported a Remain vote, have kicked off their campaigns with a promise that “Brexit means Brexit” in the words of May, while Crabb has conceded that, in his view, the Leave vote means that Britain will have to take more control of its borders as part of any exit deal. May has made retaining Britain’s single market access a priority, Crabb has not.

On the Labour side, John McDonnell has set out his red lines in a Brexit negotiation, and again remaining in the single market is a red line, alongside access to the European Investment Bank, and the maintenance of “social Europe”. But he, too, has stated that Brexit means the “end of free movement”.

My reading – and indeed the reading within McDonnell’s circle – is that it is the loyalists who are likely to emerge victorious in Labour’s power struggle, although it could yet be under a different leader. (Serious figures in that camp are thinking about whether Clive Lewis might be the solution to the party’s woes.) Even if they don’t, the rebels’ alternate is likely either to be drawn from the party’s Brownite tendency or to have that faction acting as its guarantors, making an end to free movement a near-certainty on the Labour side.

Why does that matter? Well, the emerging consensus on Whitehall is that, provided you were willing to sacrifice the bulk of Britain’s financial services to Frankfurt and Paris, there is a deal to be struck in which Britain remains subject to only three of the four freedoms – free movement of goods, services, capital and people – but retains access to the single market. 

That means that what Brexit actually looks like remains a matter of conjecture, a subject of considerable consternation for British officials. For staff at the Bank of England,  who have to make a judgement call in their August inflation report as to what the impact of an out vote will be. The Office of Budget Responsibility expects that it will be heavily led by the Bank. Britain's short-term economic future will be driven not by elected politicians but by polls of the Conservative membership. A tense few months await. 

Stephen Bush is special correspondent at the New Statesman. He usually writes about politics.