Skip to site navigation

Financial Privilege

May 2013 - January 2014

Financial_privilege_report

In Britain, the House of Commons has primacy over the House of Lords in all legislation relating to taxation and public spending. This has a number of important consequences for how parliament operates today, the best known of which is that legislation certified as a ‘money bill’ (because it relates solely to expenditure or taxation) can be delayed only minimally by the House of Lords before becoming law.

This project examined another manifestation of the Commons' financial primacy, concerning Lords amendments to legislation, which is less well known or understood. In the event that the Lords passes a legislative amendment with financial implications that the Commons subsequently disagrees with, the Commons can invoke ‘financial privilege’ and the Lords by convention does not then insist on its amendment. Although not new to the coalition government, controversy about the use of financial privilege grew during the 2010-15 parliament. Most notably, the invocation of financial privilege on the Welfare Reform Bill in 2012 provoked claims from some that the Lords was being inappropriately prevented from scrutinising government legislation. Such concerns may well re-emerge in the future, particularly if peers seek to limit government spending cuts.

This research was based around detailed, original analysis of how financial privilege was used between 1974 and 2013, as well as consideration of how such matters are dealt with in comparable legislatures abroad. The resulting report, Demystifying Financial Privilege, clarified the existing rules and procedures surrounding financial privilege, as well as making recommendations for how arrangements might be reformed.

Report

Meg Russell & Daniel Gover (2014) Demystifying Financial Privilege: Does the Commons' Claim of Financial Primacy on Lords Amendments Need Reform?

Financial Privilege Report

At Westminster the House of Commons has primacy over the House of Lords on most matters, and this applies particularly with respect to finance. Notably if the Lords passes an amendment that could affect taxation or spending, MPs may reject it citing the Commons’ “financial privilege”; convention then suggests that the Lords should not insist on the amendment. Recent claims of financial privilege – most prominently on the Welfare Reform Bill in 2012 – revealed significant confusion about this procedure, and led to allegations that it had somehow been abused by government to unfairly deflect opposition. This report clarifies how financial privilege operates, and carefully evaluates the complaints that have been made against it. Built on this analysis, plus some consideration of arrangements in overseas legislatures, it offers recommendations for how arrangements at Westminster could be improved.

Journal Paper

Daniel Gover & Meg Russell (2015) 'The House of Commons' "Financial Privilege" on Lords Amendments: Perceived Problems and Possible Solutions' in Public Law (January 2015)

Note: This material was first published by Thomson Reuters Professional (UK) Limited in Daniel Gover & Meg Russell, 'The House of Commons' "financial privilege" on Lords amendments: perceived problems and possible solutions', Public Law (2015, No1), 12-22, and is reproduced by agreement with the Publishers.

Parliament Homepage

NEWS


Read more Unit News here >

BLOG

The truth about House of Lords appointments

Wed, 29 Jul 2015 12:30:54 +0000

Yesterday Prime Minister David Cameron, seemingly undeterred by the already negative media coverage about the Lord Sewel affair, gave strong indications that he intends to make yet more appointments to the Lords. In doing so, he appeared to invoke a convention that does not exist: that of bringing Lords membership into line with Commons seats. […]

Read more...

‘English Votes for English Laws’ —a viable answer to the English Question?

Tue, 07 Jul 2015 09:00:15 +0000

Daniel Gover and Michael Kenny outline the government’s detailed proposals for introducing EVEL that were published last Thursday. They argue that, while incremental and modest in some respects, the proposals do raise wider points of constitutional principle which suggest English Votes could be the start rather than the end of a much longer process of […]

Read more...

The age of the new Parliament

Thu, 25 Jun 2015 09:05:31 +0000

The 2015 general election saw the election of the youngest MP since 1832. Chrysa Lamprinakou draws on Parliamentary Candidates UK data to highlight the slow but steady downward shift in the age at which MPs start their careers and the variation across parties. In our previous blog, we discussed the new Parliament’s composition in terms of gender […]

Read more...
Meg Russell's new book, The Contemporary House of Lords:
Lords book cover - png file

Projects 

CONSULTANCY

The Constitution Unit

Page last modified on 13 mar 14 13:17

Footer menu