Constitution unit calls for new rules on House of Commons financial privilege

13 March 2014

The UCL Constitution Unit has published a 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”.

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

Speaking at the report's launch, 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.

The report was funded by the Nuffield Foundation, but the views expressed are those of the authors and not necessarily of the Foundation.