THE Government was defeated in the Lords tonight when peers again criticised the backdating of a change to the rating system for port businesses.

Peers supported the Tory motion by 72 votes to 66 having backed a similar move in March this year.

Lord Bates, for Tories, said hundreds of jobs were at risk because port businesses were under threat due to the Governments refusal to reverse the backdating.

He told peers: "We on this side of the House will take every possible opportunity to raise this matter and protect vital jobs because the threat is real.

"The conduct of the Valuation Office Agency has been shambolic and the culpability of this Government in failing to address the manifest injustice, choosing to fight amongst themselves rather than getting a grip on the situation before it is too late, is lamentable and something people will remember."

He called on the Government to deal with the matter to save hundreds of jobs and Britains tarnished reputation overseas.

But Work and Pensions minister Lord McKenzie of Luton said that backdated rates were an inherent part of the rating system.

He told peers: "It is not reasonable to confer on one particular sector an advantage over others which is what waiving the backdated liability for businesses in ports would do."

Lord Bates said the Government had introduced measures to allow port companies to pay the backdated tax over eight years.

The motion, regretting the plans, has no legal effect, but registers a protest against ministers policy.