The defeat - the fourth on the Criminal Justice Bill - gives Michael Howard, the Home Secretary, a further headache over the Government's keynote law and order legislation. It is likely he will seek to overturn the defeats in the autumn in the Commons.
The gypsy encampment measure was part of the Government's crackdown on hippy travellers. The Bill gives police the power to curb raves and to remove trespassers. It also proposed the repeal of the 1968 Caravan Sites Act, which laid a statutory duty on local authorities to provide gypsy sites. But the Lords passed by 133 votes to 104 a cross-party amendment delaying repeal for five years.
It was a further set-back for the authority of Earl Ferrers, the Home Office minister in the Lords, who is tipped to become the next leader of the Lords in next week's government reshuffle.
He told peers that when the Act was introduced, fewer than 10 per cent of gypsies were on local authority sites, but 70 per cent were on local authority sites now, with a further 10 per cent on tolerated sites. 'The reason we want to repeal this is the numbers of those who wish to be nomads has increased,' he said.
The numbers rose from 9,800 in 1968 to 13,700. The Government is seeking to discourage people from becoming travellers. 'It is not reasonable that the taxpayer should be expected to provide sites for them,' he said.
The amendment was led by Lord Stanley of Alderley, a Conservative backbench peer, supported by Lord Avebury, the Liberal Democrat (also a hereditary peer and relative of Lord Stanley), Lord Irvine of Lairg, a Labour frontbench spokesman on legal affairs, and Viscount Tenby, a cross- bench peer.
Lord Stanley said one farmer was awarded damages of pounds 70,000 against Avon County Council for failing to provide sites. If the Lords delayed repeal, the court ruling would put renewed pressure on local authorities to provide sites.
'The problem is we have not got enough sites for gypsies and the amendment will give local authorities and private operators the time to find these sites,' he said.
Commenting on the vote, Lord Irvine said: 'It was a wise decision of the House of Lords to allow five years to test the proposition whether the private sector really can step in to provide sites for gypsies. We doubt it because, at the same time as the Government is saying it wants gypsies to provide their own sites, it is tightening planning policy to make that less likely.'
Avon and Somerset police are seeking further private-sector sponsorship for vehicles following publication of Government guidelines yesterday. The force already has a scene-of-crime van sponsored by Thresher's, the wine merchants.