Peers and MPs reject Clegg's plans to cut size of the Lords by a half

The White Paper proposes that 240 of the chamber's 300 members be elected

Nick Clegg's hopes of achieving reform of the House of Lords suffered a setback yesterday after peers and MPs rejected government plans to cut the size of the second chamber by more than a half.

The Coalition has suggested that the number entitled to sit in the upper house should be reduced from about 800 to 300, the vast majority of whom would be elected.

The plans, which have been set out in a White Paper, are being championed by the Deputy Prime Minister, while many senior Tory figures are sceptical about the need to overhaul the Lords. The paper proposes that 240 of the 300 members in the new-look chamber would be elected and the remaining 60 appointed for their specialist knowledge.

It suggests that the first contests for Lords could take place at the next general election, which is expected in 2015.

However, many in the second chamber are preparing to resist the moves and the first sign of trouble ahead came yesterday when a committee of MPs and peers examining the plans rejected a key proposal. It said that cutting the Lords to 300 members would inadvertently make it too similar to the Commons and suggested that an upper house of 450 members would be more fitting.

Lord Tyler, a Liberal Democrat member of the committee, stressed it was backing the principle of the reforms. But he added that the committee believed that cutting membership to 300, and assuming all peers would be full-time parliamentarians, would "make us too much like the Commons".

He said a reduction instead to 450 would enable some members to "keep up with their professional or business background" and "have other walks of life where they maintain interest or expertise". Lord Tyler said: "I think the public is expecting to have a second chamber which is very different to the House of Commons."

Last night a senior Liberal Democrat source said the Government was not bound by the committee's recommendations, but added that it had an open mind over the exact shape of Lords reform. Under the White Paper proposals, one-third of seats in the new chamber would be elected by proportional representation every five years starting in 2015. Twelve bishops would also sit in the reformed Lords. The 92 hereditary peers would be phased out.

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