Cameron faces "Leveson by the backdoor" after Lords defeat

Surprise defeat over press regulation will force the Tories to overturn Lords amendments in the Commons. But will Labour and the Lib Dems let them?

While everyone's attention was on the equal marriage debate, the Conservatives suffered a significant defeat in the House of Lords over press regulation. Taking ministers by surprise, peers voted by 272 to 141 to introduce a low-cost arbitration system for victims of press defamation, one of the key recommendations of the Leveson report. 

Since those papers that do not join up to the system could be punished by courts awarding greater damages and costs, the proposal represents a form of the state-backed regulation that David Cameron has unambiguously rejected. The rebellion notably included senior Tory peers such as Lord Ashcroft (yes, the billionaire party donor and media mogul), Lord Fowler, Lord Hurd and Lord Astor, Cameron's father-in-law. The economist Robert Skidelsky, a crossbench peer and NS contributor, noted that some peers had described the amendments as "Leveson by the backdoor" and added: "To my mind, that is an important merit of the bill because we are unlikely to get Leveson through the front door". Lord Fowler described the move as a "building block in implementing Leveson - a kind of stalking horse".

If the Conservatives want to avoid "Leveson by the backdoor", they will now need to overturn the amendments in the Commons. With Labour and the Liberal Democats both in favour of state-backed regulation, this could prove a challenge for the government.

For now, the long-stalled cross-party talks on Leveson continue, with the parties next due to meet on Monday. During the debate, Lord McNally, the Liberal Democrat leader in the Lords, promised that the government's proposal of a royal charter to oversee press regulation would finally be published next week. As IPPR's Tim Finch noted on The Staggers on Monday, Labour has not ruled out supporting this compromise. In her speech at the think-tank's recent Oxford Media Convention, Harriet Harman, the shadow media secretary, said she was "unpersuaded" by the idea but actions speak louder than words; Labour failed to follow through on its threat to force a Commons vote on its own draft bill in January if the government failed to bring forward satisfactory proposals by Christmas. Moreover, as Tim wrote, "being unpersuaded is not quite the same as being unpersuadable".

The government is confident that the Lib Dems, and possibly Labour, will unite around the proposal of a royal charter. But last night's Lords defeat means Clegg and Miliband now have a powerful bargaining chip.

A protest group stages a mock burning of the Leveson report outside the Queen Elizabeth II centre in London. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

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Is anyone prepared to solve the NHS funding crisis?

As long as the political taboo on raising taxes endures, the service will be in financial peril. 

It has long been clear that the NHS is in financial ill-health. But today's figures, conveniently delayed until after the Conservative conference, are still stunningly bad. The service ran a deficit of £930m between April and June (greater than the £820m recorded for the whole of the 2014/15 financial year) and is on course for a shortfall of at least £2bn this year - its worst position for a generation. 

Though often described as having been shielded from austerity, owing to its ring-fenced budget, the NHS is enduring the toughest spending settlement in its history. Since 1950, health spending has grown at an average annual rate of 4 per cent, but over the last parliament it rose by just 0.5 per cent. An ageing population, rising treatment costs and the social care crisis all mean that the NHS has to run merely to stand still. The Tories have pledged to provide £10bn more for the service but this still leaves £20bn of efficiency savings required. 

Speculation is now turning to whether George Osborne will provide an emergency injection of funds in the Autumn Statement on 25 November. But the long-term question is whether anyone is prepared to offer a sustainable solution to the crisis. Health experts argue that only a rise in general taxation (income tax, VAT, national insurance), patient charges or a hypothecated "health tax" will secure the future of a universal, high-quality service. But the political taboo against increasing taxes on all but the richest means no politician has ventured into this territory. Shadow health secretary Heidi Alexander has today called for the government to "find money urgently to get through the coming winter months". But the bigger question is whether, under Jeremy Corbyn, Labour is prepared to go beyond sticking-plaster solutions. 

George Eaton is political editor of the New Statesman.