Limits of the Lords

The great parliamentary battle of 1910-11 established that the Lords cannot override the Commons and, in particular, cannot gainsay the Lower House on matters of finance. The trigger for the crisis was the rejection by peers of the “People’s Budget” introduced by David Lloyd George. The prime minister, HH Asquith, threatened to flood the Upper House with new peers to support the measure, whereupon their lordships backed down and the supremacy of the Commons was enshrined in statute.

This century-old convention that peers do not block money measures has never seriously been challenged until today, when the Lords consider amendments to the Government’s programme of tax-credit cuts. The Conservatives were elected on a pledge to reduce welfare spending as part of the Chancellor’s efforts to reduce this country’s debt. Mr Osborne has decided that some of the £12 billion in savings is to come from changes to tax credits, a policy which has twice been upheld by MPs in the past six weeks.

Leaving aside the rights and wrongs of the policy, it is constitutionally unacceptable for the measure to be rejected by the Lords. The argument that this falls within the scope of the Parliament Act, since the Treasury decided to legislate for the reform by way of regulations rather than in the Finance Bill itself, is a specious one. Moreover, a “fatal amendment” being proposed by Lib Dem peers to kill the measure and force it back to the Commons is provocative and dangerous. If Labour and the Lib Dems are going to combine forces in the Lords to thwart the will of the elected government, they risk a crisis every bit as great as that seen in 1911.