The Opposition peers' leader Lord Richard, who acknowledged that a victory for the motion would not bring the Government down, accused ministers of economic failure, damaging the welfare state and action leading to destruction of much of the industrial base.
Opening the Labour-initiated debate, he attacked the Prime Minister, saying: 'His probationary period is more than up. He has broken promises, isolated this country within the European Union and has cast miners and others on to the scrapheap.
'He has backtracked on the principle of reforming the criminal justice system and, most seriously, he holds ultimate responsibility for damaging this country's economy. We have no confidence in him or his government.'
He said he could find no precedent for a Lords no-confidence motion, but added: 'I don't recall in the 70s hordes of people sleeping on the main thoroughfares of our capital city. I don't recollect the obvious signs of poverty and homelessness there are now.'
Replying, the Leader of the House, Lord Wakeham, claimed government success in the economy and on unemployment. He said that, against this background, 'I think that many of our European partners would view today's censure motion with some puzzlement.'
He warned that there were still dangers and problems ahead for the economy - 'and one of the biggest dangers to our recovery is the weakness of our trading partners across the Channel'.
Lord Wakeham said the Government's programme of modernisation of social provision rested on three principles: to ensure help was focused on those most in need, to discourage dependency, and to develop the welfare system, improve incentives to work and to save and 'to take responsibility for our own families'.
The former Leader of the House, Baroness Young, condemned Labour's motion as 'most unprecedented and totally unnecessary'.
Lord Rippon of Hexham, a former Conservative Cabinet minister, declared: 'In my view, it is for the House of Commons to express its confidence in the Government of the day, and not for us. I regard it as wholly unhelpful to try to polarise the position of political parties in this House.'
Lord Howe of Aberavon, the former Conservative Chancellor, said that Kenneth Clarke was right in being determined to put public finance on a sound and long-term basis. 'Far from launching an attack on the welfare state, he and his colleagues are doing their best in preserving the most effective pattern possible.'
But Baroness Castle, a former Labour Cabinet minister, said that not only had the Opposition no confidence in what the Government had done, but no confidence in the direction in which it was moving and what it intended to do.
She declared: 'The Budget shows this government has been captured by the new Tory right. They want to privatise all the social and health insurance provisions in this country, leading to the inequalities we have seen in the US.'
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