How Hague's grenade attack on the Government blew up in his own face

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Hague: Will you confirm that ... the Lord Chancellor (Lord Irvine) has been approaching the Conservative Party with a proposal to keep a proportion of the hereditary peers ... in exchange for my party's acquiescence in the rest of his ill thought out change. While we welcome this huge climbdown, we are not prepared to acquiesce.

LORD CRANBORNE telephoned William Hague from his oak panelled leader's office around mid-morning to confess that he had been negotiating with the Government behind Mr Hague's back.

The Tory leader could hardly believe his ears. A few weeks earlier, Lord Cranborne had gone to the Shadow Cabinet with the deal, and it had been rejected.

As a senior Tory, and scion of one of the oldest families in Britain, the heir to the sixth Marquis of Salisbury had been trusted to honour the decision and to drop it.

But as he later explained in an impromptu press conference, Lord Cranborne decided he had to put the future of the House of Lords above the interests of his party. "I said I was extremely sorry I had behaved quite outrageously, but I would do it again," he said, smiling broadly.

The secret deal with Tony Blair had been brought to a head by the timing of an announcement by a group of cross-bench peers, led by the former Tory Speaker of the Commons, Lord Weatherill, to unveil the deal.

Lord Cranborne told an aghast Mr Hague that he believed Downing Street was also preparing to brief the press.After a troubled lunchtime with a few close friends, Lord Cranborne, having lit the fuse, waited for the explosion.

The cross-bench peers, Lord Weatherill, Lord Marsh, and the Earl of Carnarvon, held their press conference at 3.15pm in committee room 4B of the House of Lords. The grey haired peers little suspected the role they were playing in the momentous events already happening at the other end of the Palace of Westminster.

Minutes earlier, Mr Hague confidently tossed the deal back in Mr Blair's face across the despatch box. The Tory leader believed it was a lethal blow to Mr Blair's credibility.

Disclosing the Prime Minister's readiness to throw a lifeline to 100 hereditary peers would, he believed, knock out the main point of principle on which Mr Blair had built his case for reforming the Lords. Breaking the manifesto pledge to abolish the right of hereditary peers was also likely to upset Labour backbench MPs, Mr Hague had calculated.

But the bomb lobbed at Mr Blair backfired disastrously.

"It was like hurling a grenade at a tank, seeing it bounce off and kill his own troops," said one Government minister.

Events began unfolding fast in the Lords. As the upper chamber prepared to debate the health service, Labour peerswere abuzz with rumours about the opposition peers, who had been summoned to an emergency meeting in private with the Tory leader.

At 3.32 pm, two minutes after question time in the Commons ended, Mr Hague was seen marching across the ornatemembers' lobby of the Lords to a meeting with his Tory peers. More than 120 were in the packed Moses room overlooked by a massive painting of Moses in the bulrushes.

Mr Hague told the peers why he had rejected the deal, which Lord Cranborne had accepted. The meeting continued for two hours, as Mr Hague confronted the peers with the disclosure of the deal, which had so nearly been done. At the end, the peers gave their support to Lord Cranborne, against Mr Hague, by a majority of four to one. For Tory peers, brought up on loyalty to the party, it was the nearest thing to a mutiny that any had experienced.

Mr Hague, the son of a bottled pop merchant from Rotherham, swept out for a private meeting with Lord Cranborne, the 52-year-old heir of the Cecil family and holder of a title created in 1603.

They went to the opposition leader's room, accompanied by Lord Strathclyde, the Tory chief whip in the Lords, and Michael Ancram, the Tory party chairman. Mr Hague left at 6.30 pm, having sacked him.He refused to comment, beyond saying: "I will issue a statement later."

Some of Lord Cranborne's closest friends were furious and gathered outside. There were also some quivering lips among the peeresses, who liked Lord Cranborne's patrician manner.

Mr Hague went off to a hurriedly-arranged meeting of Tory MPs, where he was given traditional desk-banging support by the backbenchers after he told them he could not stand for "freelancing" behind his back by Lord Cranborne.

Lord Cranborne cheerfully held a press conference at 7.30pm in the corridor outside his room and clashed with authority for the second time in an eventful day. The Yeoman Usher and Deputy Sarjeant-at-Arms made it clear that he was breaking House of Lords rules by allowing the cameras to film his genial departing words.

"He [Mr Hague] said he thought I had exceeded my authority and gone behind his back and he could not stand for that," Lord Cranborne said.

Mr Hague had dismissed him "like an ill-trained spaniel", said Lord Cranborne. The Tory Viscount had offered his resignation but "he said he would rather sack me. I said in his place I would have done the same".

But like a good public schoolboy, he was not complaining about the punishment that was meted out to him. "Politics is a rough old game. I have had a whale of a time," he said.

Lord Cranborne said he had been acting out of the best interests for the hereditary peers that Mr Blair was determined to destroy by trying to coax the Government into stage two reform of the Lords.

"I would rather do a deal which made it more likely for that to happen than to die gloriously like James IV on Flodden Field," he said.

Blair: We are perfectly prepared to agree ... I thought we had the agreement of the leader of your party in the House of Lords ... Can we now be enlightened as to whether we have your agreement?

Hague: We believe it is wrong to embark on fundamental change to the Parliament of this country without any idea of where it is leading to. Doesn't your total lack of principle and horse trading confirm that it is just commonsense to put that reform on hold and await the report of the Royal Commission.

Blair: No. What is commonsense is to get this thing done with as little fuss and as easily as possible, which we can now do. What is fascinating is that you are now disowning the agreement entered into by the leader of the Conservative Party in the Lords...

Hague: No deal has been made with the Conservative Party. The deal to keep hereditary peers, which you have tried to negotiate ...doesn't address the fundamental point that the Government should not be embarking on major constitutional change without knowing where it leads to. Doesn't this demonstrate your never had any principle on this matter at all?

Blair: What it proves is that even when hereditary Conservative peers in the House of Lords are prepared to agree change, you are not. That's the absurd position you've reduced yourself to! If anything indicates how you get every major strategic judgment wrong, it is this.