The government has reversed its House of Lords defeats on the Welfare Reform Bill by reaching for an archaic convention on 'financial privilege'. It's a very dangerous precedent
When I wrote my last blog, after the third of seven defeats in the House of Lords for the Welfare Reform Bill, I was – I admit – feeling buoyant. The media narrative around disability and scrounging seemed to be turning, the wider public were actually starting to scrutinise the implications, and the Lords started to oppose many of the proposals that came before them.
Time limiting a contributory benefit to one year? Not acceptable – it undermines the entire premise of social insurance. Applying this rule to cancer patients? Just not decent. Including child benefit in an overall benefit cap? No – that would amount to withholding a universal benefit and penalise bigger families. And so it went on. As the week progressed so my faith was restored in the bicameral system and the concept of checks and balances. A triumph for reason over rhetoric.
But what a different a week or so makes. As the bill returned to the House of Commons, the government declared the Lords amendments invalid, based on the rule of financial privilege, an archaic resolution from 1671 which states that the Lords cannot rule on bills of 'aids and supplies' – that is, raising tax and spending it. By invoking the privilege, the government made clear what everyone already knew – the bill is designed to reduce spending – so the Lords have no right to amend the proposals.
Financial privilege has been used increasingly in recent years, and whilst the Lords usually object when this occurs, they are essentially powerless. And so it would seem in the face of the juggernaut that is the Welfare Reform Bill, the Lords' detailed scrutiny, weighing of the evidence and ultimate rejection of many of the proposals barely held the process up by a week. Disability campaigners were left speechless, seeing a well earned victory snatched away by a government seemingly hell bent on pushing the bill through regardless of widespread objection.
In retrospect, the Lords should have foreseen this move, and been more strategic in their objections. If they had held out for more government concessions in return for their support (such as those agreed around replacing DLA with the Personal Independence Payment), allowed watered down proposals to go through and perhaps reserved their outright opposition to one particularly nasty proposal (say, the time limitation of ESA for cancer patients), then the government may not have sought to overturn their rulings in their entirety. Of course, hindsight is a wonderful thing.
The bill passing through to legislation now seems inevitable, and I believe even those supportive of the proposals should be concerned by this. This latest, very broad interpretation of financial privilege could be the thin end of the wedge as the government embarks on a series of legislative steps to reduce public spending. It could be used to nullify the Lords' scrutiny for every piece of legislation relating to public expenditure (how many bills aren’t related to expenditure?) from tuition fees to high speed rail and pensions. It turns the whole bicameral system into a sham.
But it is a fait accompli? In their utter desperation, some campaigners have started a petition to ask the Queen not to grant the bill Royal Assent – something a monarch hasn’t done since 1708. But perhaps more promisingly, the Constitution Unit at UCL have mooted another option. They point out that the Welfare Reform Bill is not just about cutting expenditure, but covers a wide range of reforms: changes to assessment processes, creating new benefits, and so on. As such, the Lords might reject the Common’s claim of financial privilege. They could, in fact, reject the bill in its entirety, which would delay it for a year.
This is a radical option. But we have to remember; financial privilege is obeyed by the Lords only by convention, just as it is convention that the Commons use it 'sparingly'. By applying the privilege more frequently to bills that don’t quite fit the criteria, the Commons seem to be breaking convention. Perhaps now’s the time for the Lords to do the same?
