Andrew Grice: PM is caught between yellow devil and deep blue ranks on Lords

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On Monday, David Cameron and Nick Clegg will try to get the Coalition back on track after it hit the buffers on House of Lords reform this week. The Prime Minister and his deputy will make a joint appearance on the safer ground of the economy, as the Government unveils measures to boost jobs and growth. Their message: the Coalition remains committed to its core mission.

The two leaders hope the huge Conservative rebellion over House of Lords reform will fizzle out during the summer recess, which begins on Tuesday. They will be disappointed. The 100-plus Tory opponents of Mr Clegg's plan are already planning how to go in for the kill in September.

Although many Tory rebels have genuine doubts about the reform blueprint, for others the chance to kick Mr Clegg and the Coalition is irresistible. Many Tory backbenchers are in denial about being in coalition because they hate it. The Lords shake-up offers the perfect target. It is Mr Clegg's baby, not fathered by Mr Cameron, who dismissed Lords reform as a "third-term issue" before the last election.

Mr Cameron's failure to deliver enough MPs to push through a timetable motion to ensure the Bill's Commons passage has severely dented its chances of becoming law. "It is effectively dead," said one Liberal Democrat minister. Mr Clegg refuses to throw in the towel – though, like Mr Cameron, he accepts it would pointless to allow the Bill to dominate the Commons for months.

If the Tory rebels can make life difficult for Mr Cameron, then so can the Liberal Democrats. Their threat to derail parliamentary-boundary changes which could give the Tories an advantage at the next election is now official policy. Mr Cameron is caught between the yellow devil and the deep blue ranks on his backbenches. He somehow needs to keep both onside.

The tensions inside the Coalition have obscured Labour's role in the Lords saga. Ed Miliband said on Thursday that the Government should "get on" with the Bill. That was a bit rich, coming from a party which voted for it in principle on Tuesday but also jumped into bed with the Tory rebels to force the Government to abandon the crucial timetable motion.

Such strange alliances are the reason Lords reform has remained unfinished business for the past 100 years. In the 1960s, it was blocked by Michael Foot and Enoch Powell. Even when there is a majority in favour,it is difficult to find a plan around which reformers can unite. Some MPs want to abolish the Lords; others want anything between 20 and 100 per cent of peers elected; others demand a referendum, oppose the 15-year terms or proportional representation, and so on.

The revolt by 91 Tory MPs shows that the government coalition does not necessarily translate into a parliamentary one. Yet it could do if Labour matched its pro-reform rhetoric with deeds. Many Labour MPs either don't back Lords reform or can't resist the temptation to destabilise the Coalition.

The Liberal Democrat threat to the new boundaries will increase the ranks of Labour MPs who want to scupper Lords reform, since keeping the existing parliamentary map would boost Labour's prospects in 2015. "I expected us to be 60-40 against the Lords Bill," said one Labour reform supporter. "It is more like 90-10 against now."

Like Mr Cameron, Mr Miliband has a nightmare in trying to unite a divided party. The Lords is a test of his leadership and progressive credentials.

Some Labour folk say the best chance of securing a modernised Lords would be in a Lib-Lab coalition. Perhaps they want to ensure their party gets the credit. But there might not be a better opportunity than now. And Labour's chances of wooing the Lib Dems in a hung parliament would be reduced if they continue to play their current games. "Labour must not appear to block reform," said Graham Allen, Labour chairman of the Constitutional Reform Select Committee. "Labour has a chance to get back onside by enabling reform – where a party of the centre-left should always be."

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