Revolt in the House of Lords?

Is the House of Lords about to go nuclear against the government; will it face massive retaliation if it does?

The corridors of the Lords are humming with rumour about the prospect that next week peers will be invited to strike down the government's tax credit cuts. And today it was reported that the government would hit back by either "suspending" the House of Lords or by creating yet more Conservative peers to give it a better chance of getting its measures through.

I'm not sure any government has the power to simply "suspend" a whole house of Parliament, although generations of infuriated ministers have probably wanted to. One Labour source dismissed it as a combination of "jumping the shark while throwing toys out of the pram." But that threat, reported from an unnamed source, by a reputable journalist, indicates just how alarmed ministers must be at the prospect of a Lords defeat that could throw their entire spending strategy into chaos.

That defeat is only possible because the changes are being approved through a Statutory Instrument, rather than through the more normal route of a finance bill. Not since HH Asquith faced down the Lords, in an epic constitutional crisis, a century ago, have peers dared to meddle with financial legislation. Indeed the mere words "financial privilege" are normally enough to persuade peers to keep to their appointed limits. But the same rules don't apply to SIs, so the cross party group around the anti-poverty campaigner Baroness Meacher, a Crossbencher, poses a serious threat, if they did put down a "fatal motion."

The exact terms of the motion are being finalised at the moment and will probably appear on the Lords order paper on Thursday, and a fatal or very strong regret, if pushed to a vote on Monday, would have a very strong chance of being passed.

But the terms of the motion will be crucial, a mere "regret" motion , which simply signifies peers' regret at the changes, would not trigger further Commons consideration, and so, from the point of view of the hardliners, which includes Lib Dem peers, who will be whipped to support a fatal motion, it would be completely ineffective. The only exception would be some kind of "sunrise motion" which would prevent the SI taking effect until some condition was met.

There are now quite a few voices urging caution, precisely because striking down this SI would be close to a declaration of war and would probably force the government to rush through emergency legislation, which would cost time and political capital, forcing ministers to revisit a very difficult issue at some length, and perhaps to offer concessions to those of their MPs who're unhappy, like James Cartlidge or Stephen McPartland.

There may, perhaps, have been two fatal motions against unamendable SIs in the last 30 years and none on an issue of anything approaching this magnitude. "Meacher's got to be stopped," one Labour peer, an ex-minister, told me. He expects ministers to move fast to clip their Lordships' wings if it is passed, perhaps by creating enough peers to give the Government effective control of the House, which would mean hundreds.

But they might not stop there, and could follow up with explicit curbs on the powers of the Lords in legislation although that might, as Nick Clegg discovered with his House of Lords Reform Bill, become bogged down in the Commons, and might require the blunt instrument of the Parliament Act to force into law, and take up two years in the process.