Place potatoes in a large saucepan and cover with water. Bring to a boil. Reduce heat; cover and simmer until tender, 8-12 minutes. Drain.
Meanwhile, place peas and water in a small saucepan. Bring to a boil. Reduce heat; cover and simmer until tender, 3-5 minutes. Drain.
In a large saucepan, saute onion in butter until tender. Stir in the flour, salt and pepper until blended; gradually add milk and cream. Bring to a boil; cook and stir until thickened, about 2 minutes. Stir in potatoes and peas; heat through.