Russell, M; Gover, D; (2014) Demystifying Financial Privilege: Does the Commons' claim of financial primacy on Lords amendments need reform? Constitution Unit, Department of Political Science, University College London: London, UK.

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Abstract

At Westminster the House of Commons has primacy over the House of Lords on most matters, and this applies particularly with respect to finance. Notably if the Lords passes an amendment that could affect taxation or spending, MPs may reject it citing the Commons’ “financial privilege”; convention then suggests that the Lords should not insist on the amendment. 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 somehow been abused by government to unfairly deflect opposition. This report clarifies how financial privilege operates, and carefully evaluates the complaints that have been made against it. Built on this analysis, plus some consideration of arrangements in overseas legislatures, it offers recommendations for how arrangements at Westminster could be improved.

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