At an event last night in parliament, the Constitution Unit launched a research report calling for the relationship between the Commons and the Lords on financial matters to be revised. The research was sparked by controversies over the coalition’s Welfare Reform Bill, when defeats inflicted by the Lords (on controversial matters such as the benefits cap and so-called “bedroom tax”) were rejected using Commons “financial privilege”. Among negative comments at that time, former Conservative Chancellor Lord Lawson of Blaby suggested that use of financial privilege had been “completely contrary to the conventions of the constitution”.

The report looked at practice on financial privilege dating back to 1974, using parliamentary records, and included interviews with those currently involved.

Speaking at the launch, Constitution Unit Deputy Director (and report lead author) Meg Russell said that “claims that the government have somehow abused financial privilege are unfounded, but there is widespread confusion about the practice - both inside and outside parliament - and a need for far greater transparency”. Report co-author Daniel Gover said that “complaints about financial privilege are nothing new, but they have been particularly prominent under the coalition since 2010 - and such controversies are likely to recur unless procedures change”.

The report concludes that financial privilege has become increasingly salient due to the newly confident House of Lords, followed by the post-2010 political agenda of spending cuts. Changes that it argues for include:

  • Far greater clarity on the parliament website about how financial privilege works;
  • A clear and public definition of what Commons financial privilege extends to;
  • Statements issued (as for example occurs in Australia) explaining why financial privilege is thought to apply to any specific Lords amendment;
  • Other elements of clarification, and streamlining of procedures.

Responding to the report, highly regarded lawyer and Crossbench peer Lord Pannick (who has had his own amendments rejected on financial privilege grounds, without clear reasons) said “the Constitution Unit, Meg Russell and Daniel Gover have done a very great service in identifying the principles of financial privilege”. He said “I hope the report will encourage the Commons’ authorities to look again at their procedures. At the moment, the procedures are indefensible”.

Notes to editors

  • The Constitution Unit is an independent and non-partisan research centre based in the Department of Political Science at University College London.
  • The report is the main output of a research project “An abuse of privilege? The Commons, the Lords and financial matters”, which was funded by the Nuffield Foundation (for full details, including a blogpost and presentation from last night’s seminar, see here).
  • Meg Russell (meg.russell@ucl.ac.uk) and Daniel Gover (d.gover@ucl.ac.uk) are available for interview.