The Commons, the Lords and 'financial privilege'

This project aimed to improve understanding of 'financial privilege', the convention by which the House of Commons can reject amendments made to draft legislation by the House of Lords if those amendments affect taxation or spending. 

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 been abused by government to unfairly deflect opposition.

Researchers looked at practice on financial privilege dating back to 1974 using parliamentary records and interviews with key parliamentary officials to clarify how privilege works. They also looked at how comparable legislatures abroad deal with financial matters.

Findings

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.