Tax Credits (Income Thresholds and Determination of Rates) (Amendment) Regulations 2015

Debate between Baroness Thomas of Winchester and Lord Lawson of Blaby

Monday 26th October 2015 Lords Chamber

[Baroness Thomas of Winchester (LD)]

My Lords, there seem to be two strands to this emotive phrase “constitutional crisis”, which is what I would like to address. The first is that this House should not vote down a statutory instrument—certainly not one that has been through the House of Commons. But there is no Standing Order which lays this down, and the Parliament Acts are silent on the primacy of the Commons over statutory instruments. Yes, it is taking a very rare step, but the footpath is there, even if it is rather overgrown. In this House, we do not look to Erskine May so much as the Companion to the Standing Orders, which is where we find that this House has an unfettered right over statutory instruments. If an instrument is not approved by this House, there is nothing to stop the Government immediately bringing another instrument to both Houses with a minor change. It is time we stopped being bullied over how we consider statutory instruments.

The other strand of the so-called constitutional crisis involves the primacy of the House of Commons over financial matters. Here, I echo what the noble Baroness, Lady Hollis, said. The parent Act from which this instrument comes was not certified by the Speaker as a money Bill, and if this House is entitled to debate the statutory instrument at all—which it is—then it is entitled to approve or to decline to approve it. It is not a question of courtesy; this is what we do and what Parliament has decreed. We would be failing all those affected by this measure if we simply pulled a duvet over our faces and turned our backs to the wall while saying it was none of our business.

If the Government had wanted to avoid this situation, why on earth did they not introduce a very short tax credits amendment Bill? Then we could have debated it in the usual way, with none of this intolerable pressure. If this House had sent back an unacceptable amendment, the Commons could have invoked financial privilege and that would have been that, but we might have found a way to tweak such a Bill that would have found favour with all those Conservative Members who have been calling for just that.

If the Bill route had been taken, we might have had a much more informative impact assessment, which could have told us what was likely to happen to those low-paid workers affected when the tax credit changes happen next April, instead of being told that by 2020 there may not be quite so many losers. We surely know that not all the thousands of employers up and down the country will pay the new living wage immediately to all part-time workers for the same number of hours to make up the shortfall. As it is, for the Government to decide to make a very controversial change by way of an unamendable statutory instrument, and then to bully members of this House into passing it by telling us that we are provoking a constitutional crisis if we do not agree to it, is surely quite unacceptable. We should stand up for what we believe to be morally right. The spirit of 1911 is being invoked, but at least Lloyd George wanted to take from the rich to pay the poor. George Osborne seems to want to do the opposite.

[Lord Lawson of Blaby (Con)]

I suspect that I am not the only one on this side of the House who feels torn on this issue. The constitutional position, which I will refer to first, has been set out admirably by the noble and learned Lord, Lord Mackay, and it is very clear: budgetary matters are the prerogative of the other place—of the elected Chamber—and this is undoubtedly a budgetary matter, however it is dressed up. What is the purpose of the measure? The purpose of it is to help reduce the budget deficit, and everybody is agreed that it should be—