We should be increasing the number of MPs, not decreasing them. As things stand the variable size of the constituencies means that some MPs represent more constituents than others, so something has to be done, but reducing them will decrease their availability to constituents. This increases what has become known as the democratic deficit. Reducing the size of the bigger constituencies will increase the availability of MPs to their constituents and balance the level of representation.
There is no clear argument about whether this will adversely affect the numbers of Labour MPs. There is also no argument to be had in terms of electoral bias. Take the last election. The Conservatives received 7.1% more votes and secured 306 seats—which is 7.4% more seats—than Labour UK-wide. That seems like a small bias in favour of the Tories to me.
On top of this, the electorate increases year on year, (currently by about half a million a year: Dec 2010 490,028 – Dec 2011 485,935) but the number of MPs hasn##Q##t kept pace. If we we to take the average constituency size as 70,000, to maintain the level of representation we would need to increase the number of MPs by 6.5 a year or 32 per parliament (on average).
There is no reasonable case to be made for reducing the number of MPs UNLESS your aim is decrease the level of democracy in Britain.