Reshuffle over, and a tougher team in place, Cameron believes he can place the problems of the spring and summer squarely behind him, and look forward to a much better autumn. Cameron has had a punishing eighteen months. Osborne has been on the run since his Budget. It is vital things pick up. Even with no obvious challenges in sight, Cameron’s future is very much in the balance.
NINETEEN
Lords and Boundaries
January–December 2012
Nick Clegg has had a very poor 2011. His party are hammered in the polls, his popularity ratings are on the floor, and he fails to win the AV referendum. His own survival and his party’s position require him to show he can achieve constitutional reform, which his party holds dear, as fruit from the coalition. Following Chris Huhne’s dramatic resignation on 3 February 2012, when he admitted to perverting the course of justice over a speeding offence, the threat of a challenge to Clegg’s leadership recedes for a while. But he remains adamant that he must see constitutional reform. ‘I understand this and am happy to accommodate you,’ Cameron tells him – until the heat is on and Cameron engages with exactly what this support will mean.
Polls regularly suggest there is widespread popular support for the replacement of the Lords with an elected chamber.1 The political classes recognise that the reforms introduced by Blair in 1999, cutting the number of hereditary peers to just ninety-two, were only the first stage in a continuing reform process. The House of Lords is acknowledged to be too big: it is the largest second chamber in any democracy (and it is the only second chamber in the world larger than the first).2 In 2003 and 2007, proposals for further reform were defeated. In 2009, the judicial function of the Lords passed to the Supreme Court. There is unfinished business here.
The Conservatives include a commitment to reform, albeit a tepid one, in their 2010 manifesto: ‘we will work to build a consensus for a mainly elected second chamber to replace the current House of Lords’.3 A similar pledge was in the previous two manifestos: it has been Conservative policy to have a mainly elected second chamber since 1999. The Lib Dems go much further in their own manifesto, stating they will ‘replace the House of Lords with a fully elected second chamber with considerably fewer members than the current house’.4 ‘We’ve still got the temporary arrangement we had in 1911,’ says Nick Clegg. ‘It’s an absolute absurdity that we have this Gilbert and Sullivan chamber.’5 With such manifesto commitments, it is easy for those involved in the coalition negotiations to agree the basis for action to take place many months in the future. ‘We will establish a committee to bring forward proposals for a wholly or mainly elected chamber on the basis of proportional representation’, the Coalition Agreement says.6 ‘Ah,’ says Oliver Letwin, ‘the form of words we used was less than total commitment to House of Lords reform.’7 Officials agree that, ‘at the end of the day, the position in the Coalition Agreement on Lords reform is very far from clear’. The seeds of future strife are therefore sown at the very genesis.
Clegg is fixated on delivering Lords reform. He has lost the innocence and trust in the coalition that he had in its first year. The AV experience wiped it away. In January 2012, he tries to unilaterally pressure Cameron into action on Lords reform, without any warning, so frustrated and suspicious has he become, which creates friction between them and results in a rare and frank direct phone call on the matter. From the spring, Clegg begins to hold monthly cross-party meetings in his room in the Cabinet Office. Conservative members on it are far from happy. ‘It was all very confusing; Nick Clegg was leading it, but he appeared not really interested. The meetings dragged on and on but he hadn’t read the papers, or mastered the details or the implications,’ says a senior Tory.
Wednesday 27 June sees the House of Lords Reform Bill introduced to the House of Commons. It proposes a 450-strong Upper House, 80% of whom will be elected, and the remaining members to be appointed on a non-party basis. Peers will be elected on the same day as major national polls: there will be eight voting regions, giving the electorate a choice between parties and individuals. Church of England bishops in the Lords will be cut from twenty-six to twelve, while members of the revised body will no longer have the title ‘Lord’. The new name is yet to be decided upon by Parliament, though powers for both Houses will remain unchanged.8 ‘We have been discussing this issue for a hundred years and it really is time to make progress,’ says Cameron on the day the bill is introduced. ‘There is a majority in this House for a mainly elected House of Lords and I believe there’s a majority for that in the country. But if those who support Lords reform don’t get out there and back it, it won’t happen.’9
Conservative backbenchers became worried long before the bill is introduced. Their concerns now crystallise in an article in the Observer the weekend after publication of the bill, written by Tory MP Jesse Norman, a loyalist with a record of supporting Cameron. Norman is a traditionalist who is writing a book on Edmund Burke, the eighteenth-century conservative philosopher who argued for preserving tradition. Norman describes the bill as a ‘hopeless mess … confused, inaccurate, self-contradictory and disingenuous … it would be a catastrophe for our country’.10 The expense is not the least of his concerns: he writes that the new senate would cost three to four times more than the current Lords. He further dislikes the ninety appointed senators who he says will be anomalous with the elected principle, and he does not favour the regional nature of the franchise. The bill, he concludes, ‘will prevent real reform’.11
Recriminations soon begin over who was responsible for the problems the bill encounters. Clegg is the prime culprit, according to the Conservatives. If only he had been willing to listen to concerns from us, they allege, a set of proposals could have been produced that would have passed through the Commons; ‘it was a failure to prepare the ground,’ agrees one official. ‘If you’re serious about this,’ Conservative Leader of the House of Lords Strathclyde had said to Clegg, ‘you will get it through, but only if you build a rapport with Labour and do it on the second reading and in committee.’ Strathclyde sees correctly that the divisions are not between the political parties but within them and therefore wide support will be necessary across all parties.12 Despite Lib Dem feelings to the contrary, Cameron is still ‘broadly in favour of the proposals’. As one senior official puts it, ‘after all, the current conversation with the House of Lords could be quite hard to defend’. However, the Lib Dems fail to see this and believe that pressure is required. ‘They were only going through the motions,’ says Julian Astle, senior aide to Clegg. ‘That was why we needed him to call it a “first term” priority and we thought he would only do that if we raised the stakes.’13 Some truth lies on both sides: Clegg hadn’t wanted to compromise on the purity of the Lib Dem ‘full monty’ proposals because it would have looked like weakness; and Cameron, ever wary of his own backbenchers, had indeed been trying to fudge it. Insiders say that ‘it was a hell of a problem to get the PM and chancellor to focus on it – an absolute nightmare’. Both men had suspected that they would face a massive defeat on it and wanted to delay it until the party came back into line. But that was not happening. In February 2012, 101 Tory MPs had written to Cameron criticising the subsidies paid to the onshore wind turbine industry; in March, MEP Roger Helmer defected to UKIP; in April the Budget was being unpicked; while in May, 405 Tory councillors lost their seats.
When in trouble, Cameron’s strategy is often to kick problems as far as he can into touch. By the time he can delay it no longer and the bill is published, he has become unclear what exactly he is trying to achieve. That lack of clarity transmits itself to the party. He sends out mixed messages on how important the bill is to him. Chief Whip McLoughlin is finding his job almost impossible and in Parliament ‘People kept asking, “Prime Minister, do you care about the House of Lords reform?” and he kept changing his mind.’
Cameron has a torrid couple of weeks after the bill has its first reading in the Commons. Many Conservative MPs are impressed with Jesse N
orman’s argument that a finely tuned constitution would be unbalanced if an elected House of Lords challenged the Commons for authority. Obama’s problems in Congress are fresh in everyone’s minds, and a picture is painted of a US-style gridlock between both chambers, which would be resolved not by democratic representatives, but by lawyers and judges. Some civil servants have their own concerns about the bill too. ‘We worried about the way that 800 years of House of Lords procedure was about to be trashed,’ says one.
By 6 July, the Tory rebellion is spreading and is thought by the whips to be ‘up to 100’: only fifty will be needed to defeat the bill entirely, if Labour oppose it.14 Mark Harper, Minister for Political and Constitutional Reform, is running the operation to pull support together. ‘I would disagree with the contention that it is a Lib Dem bill,’ he says, and he works hard to remind Conservative MPs that it has been party policy for the previous thirteen years.15 Big beasts like William Hague are brought in to win over the rebels. Lib Dems complain of reports they receive that ‘Hague is approaching rebels with a twinkle in his eye and says he needs to speak to them about Lords reform. He pauses and then adds: “There we are. I’ve spoken to you about Lords reform.”’16 Even Cameron is reported to be nodding and winking to backbench opponents in private saying, ‘I know none of us want this.’
On 7 July, nine former Cabinet ministers including Geoffrey Howe and Norman Lamont attack the proposal in a letter sent to MPs, urging them to defy Cameron and defeat the measure. The Lords, they argue, is ‘a vast reservoir of talent and experience, which complements the more youthful and vigorous House of Commons, without ever being able to threaten it’.17 On 9 July, Clegg argues passionately in the Commons in favour of his reforms. His reception is hostile, with Labour and Tory MPs trying to drown him out. The Lib Dems are furious that Cameron is not present (reports circulate that he is visiting the Farnborough Air Show).18 ‘We all knew it was important that the PM signalled his support for the bill,’ says Jonny Oates. ‘Mark Harper asked him to be on the front bench for the debate and we reinforced the request. When he failed to make himself available, that was the moment we knew that the PM did not intend to make any real effort to get the bill through.’19 Tory rebels publish their own letter that day expressing ‘serious concern’ about the reforms.20
On 10 July, at 4.39 p.m., Leader of the Commons George Young announces the withdrawal of the timetable for the bill.21 This notionally gives Cameron more time to bring recalcitrant Tory MPs onside. Lengthening the process also removes one of Ed Miliband’s objections – too little time to debate such a substantial bill. That evening at 10 p.m., the vote on the second reading passes the Commons by 462 to 124. Ninety-one Conservatives vote against a three-line whip: it is the biggest rebellion of a second reading of a bill in the parliament (though 134 vote against Cameron’s wishes on a free vote on gay marriage in February 2013, and 114 vote against the omission of a referendum bill from the 2013 Queen’s Speech). But denying the bill a timetable effectively kills it off for good.
Cameron has been at his weakest in his handling of this bill, blowing one way, then the other. But the realisation that its effective defeat will bring him serious problems is beginning to sink in. Cameron is still reeling at what he believes was an attempt by Jesse Norman to deliberately misrepresent his position on the Lords. He confronts Norman in the Commons shortly after the vote, pointing at him in ‘a very aggressive manner’. Norman is visibly ‘taken aback’ by the vehemence of Cameron’s reaction to him.22 Cameron and Number 10 know they are running into an unholy mess. They accept that many Tory MPs share Norman’s concern, but think others are using it as a stick with which to hit Cameron, or the despised Lib Dems, or both.
It is more than humiliation and fatigue that is embittering Number 10. The Lib Dems have chosen to push the nuclear button. Clegg has met several times with his advisers. His line is, ‘The only way we’re going to get the Conservative Party to deliver on their commitment in the Coalition Agreement is to warn them about the consequences of not delivering.’ He requests a meeting with Cameron. ‘If you do not deliver on the Lords, we will not deliver on the boundary changes.’ To underline the message, Astle searches out Llewellyn and says, ‘Ed, does every Conservative backbencher understand that if you don’t vote through the House of Lords reform, they’ll lose boundaries, and may well lose the general election if it’s that close?’ ‘Yeah, yeah, we’ve told them,’ Llewellyn replies. ‘Tell Jesse Norman and the 1922 Committee that you understand how deeply concerned they are,’ Astle advises, ‘but the fact is that the Conservative Party has promised to do it, and do it they will.’ As the Lib Dems have warned Cameron of the consequences, they regard their reciprocal withdrawal of support on boundary reform not as vengeful, but as ‘self-harm’ the Conservatives inflict upon themselves.
Conservative MPs will not budge, and for good reason. The Coalition Agreement does not explicitly link the two issues. ‘There was no sense that the boundary changes were a quid pro quo,’ says one senior civil servant. In fact, the Agreement states that boundary reform is linked to the AV referendum. Cameron makes it clear to Clegg he cannot guarantee his party’s support. Neither are Labour willing to support the bill, on what the Lib Dems think are spurious grounds. Clegg has had enough of the farce. On 6 August, he seizes the initiative. Those who have been opposing the bill, he says, wish to inflict a ‘slow death’ on it, which will take up ‘unacceptable’ amounts of parliamentary time. He cannot allow this to happen, so is withdrawing it. Cameron sees his statement before it is made, but Clegg is in no mood to modify it.23 ‘The Conservative Party is not honouring the commitment to Lords reform and, as a result, part of our contract has now been broken,’ Clegg says. ‘A coalition works on mutual respect; it is a reciprocal arrangement, a two-way street. So I have told the prime minister that when, in due course, Parliament votes on boundary changes for the 2015 election, I will be instructing my party to oppose them.’24 On 3 September, Clegg announces to the House of Commons that the Lords bill is to be withdrawn altogether.
‘Boundary reform was the most important single thing we needed to get from this parliament from a party political point of view,’ says Liam Fox, ‘and we failed to get it.’ His views echo those of many fellow MPs.25 To Cameron sceptics amongst MPs, boundary reform was one of the very few bits of the Coalition Agreement that they liked: ‘We will bring forward a [bill] … for the creation of fewer and more equal-sized constituencies’, the Coalition Agreement had stated.26 Few could dispute the democratic case for change. The proposals envisaged all constituencies being within 5% of the optimum number of 76,641, excepting the four island seats. Mainland constituencies currently vary in size from 41,000 to 91,000, approximately. Stephen Gilbert had been tasked to oversee the boundary changes and to work with every Tory MP. There would be only 600 MPs in the new House of Commons (as opposed to 650): he estimated that at the 2010 general election, had the proposed adjustments from the boundary commission been in place, the Conservatives would have won between 301 and 306 seats, a greater proportion than they actually achieved in 2010. Whatever the merits, Labour was never going to like the proposals on pragmatic grounds, because the status quo benefited them, with their votes much more efficiently spread across constituencies.
Conservative anger against Cameron and Clegg is real. Many believe that the Coalition Agreement had pledged the Lib Dems to supporting boundary changes in return for the AV referendum, regardless of House of Lords reform. ‘Of course there was a bloody link!’ says Clegg. ‘You can’t just say “we’re not going to deliver House of Lords reform” and expect the Lib Dems to dutifully march through the lobbies for them on boundaries. It’s absurd. A deal’s a deal. It obviously upset David very much. He got very angry about it.’27 The Lib Dems become deeply indignant with the Conservatives. ‘The Coalition Agreement, much like a legally binding document, can’t be overstated to us. We were in government to implement the whole thing. It’s not an à la carte menu from which the Tories
can pick and choose what they like.’28 The Lib Dems think they have walked through fire for the sake of the coalition, supporting the Conservatives on the cuts and, most painfully, on tuition fees. Their support for the government on a whole range of policies has caused them grief from their members and supporters.
At the very heart of the coalition is a fundamental disequilibrium which neither party ever fully acknowledges. The Lib Dems hadn’t seriously expected to be in power after the general election, and need to prove their ability to be responsible partners in government. Conservative MPs had been very much expecting to win, and many blame Cameron for their failure to do so. They never totally accept the Lib Dems and thus do not regard their demands as remotely legitimate. ‘Some Conservative MPs think they can pick only what they like,’ says Oates. ‘We were never going to allow that: it isn’t how a coalition operates.’29 ‘We’re not supposed to cause trouble,’ adds Lena Pietsch, Lib Dem deputy director of communications in Downing Street. ‘We’re not supposed to answer back. We had to constantly remind Conservatives they wouldn’t be in power without us.’30
Cameron at 10 Page 28
