THE government faces its first major setback over the Trade Union Bill in the Lords today, with peers uniting across the benches in a bid to defeat partisan Tory changes to party funding.

Labour has tabled a motion arguing that the effect of the proposals, which could slash the party’s income by £6 million a year, should be considered by a select committee.

Shadow leader of the upper house Angela Smith will argue  that a committee could “take an independent view away from the heat of party-political debate in the Lords chamber.”