The defeat by 260 votes to 127 - a majority of 133 - was led by the veteran Labour campaigner Lord Ashley of Stoke. "On incapacity benefit, the Government are acting disgracefully. We are not jeopardising the Bill. We are simply challenging the Government," he said. Alistair Darling, the Secretary of State for Social Security, will ask the Commons to reverse the defeat today before rushing the Bill back to the Lords.
The Government could lose the Bill if it is not passed before the start of the new session next week. Lord Ashley warned that the Lords will not be the first to "blink" in the stand-off, but there are rumours that the Tory front bench will abstain to let the Bill through. Peers opposing the Government included the Duke of Buccleuch, who was disabled in a riding accident, and Lord Rix, the chairman of Mencap, the mental health charity.
Mr Darling warned that the Government would not give any more concessions on the Bill. Ministers said the Government was ready to lose the measure and reintroduce it in the next session of Parliament next week rather than give more ground to the rebels.
Mr Darling warned there would be no more concessions. He said last night: "We are an elected Government entitled to get this Bill on to the Statute Book and we hope that the Lords will accept that."
He stressed that he had made two significant changes to the Bill. "I have made it very clear that there are no further changes to come."
The Chancellor's upbeat economic report today, which will show increased tax receipts, will make it harder for the Government to avoid another rebellion in the Commons tonight. Whips in the Commons were trying last night to stave off a repeat of the rebellion last week when 54 MPs voted against the Bill. One prominent left-wing MP said hints had been made that he could win promotion if he did not oppose the Government. "I was told that I was not a loony Leftie, not beyond the pale, and could go a long way, if I kept my head down and my nose clean," said the MP. "They knew it was nonsense, but they are pretty desperate."
Ministers fear that a big revolt among MPs will stiffen the resolve of peers to vote against the Bill, which will fall if it is not passed before the State Opening of Parliament next Wednesday.
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