Welfare Reform Bill

Lord Strathclyde Excerpts

Tuesday 14th February 2012 Lords Chamber

Moved by

[Lord Strathclyde]

That the Commons reasons and amendment be now considered.

[The Chancellor of the Duchy of Lancaster (Lord Strathclyde)]

My Lords, I beg to move the Motion on behalf of my noble friend Lord Freud. I also felt that it might be a useful opportunity for me as Leader of the House to say a few words about the relationship between the two Houses and, in particular, the financial privilege of the House of Commons. After all, this being Valentine’s Day, it is not a bad time to talk about relationships.

Perhaps I may begin by commending to the House the statement made by the noble Baroness, Lady Royall of Blaisdon, on 10 February 2009. Everything I say today is based on that material and I am grateful that there is not an inch between us. I also commend the paper on the subject by the Clerk of the Parliaments of 10 February 2009, yesterday’s update by the current Clerk of the Parliaments, and the note published by the Clerk of the House of Commons last Thursday. All three documents are available in the Library and online. They all accord with each other and clearly set out the position, which I shall now try to do with something approaching the same clarity and accuracy.

Even for a Conservative, the financial privilege of the House of Commons cannot be considered new. Its origins lie in the constitutional settlement that followed our civil war. The Commons agreed its first resolution on the subject in 1671, and in 1678 resolved that:

“All aids and supplies, and aids to his Majesty in Parliament, are the sole gift of the Commons; and all bills for the granting of any such aids and supplies ought to begin with the Commons; and that it is the undoubted and sole right of the Commons to direct, limit and appoint in such bills the ends, purposes, considerations, limitations, and qualifications of such grants, which ought not to be changed or altered by the House of Lords”.

That resolution settled the relationship between the two Houses for a long time, until the trauma of the Finance Bill of 1909 when this House rejected Lloyd George’s Budget. That led to the Parliament Act of 1911, which put the legislative relationship between the two Houses on a statutory footing and formally circumscribed our role in Bills which deal exclusively with expenditure or taxation or the granting or raising of loans—Bills referred to as money Bills. For the avoidance of doubt, the Welfare Reform Bill is not a money Bill. It is a normal public Bill, some provisions of which relate to expenditure.

At this point I should make clear that the Commons’ financial privilege has, from its origins, extended to both taxation and expenditure. As successive editions of Erskine May have put it:

“The Commons’ claim to sole rights in respect of financial legislation applies indivisibly to public expenditure and to the raising of revenue to meet that expenditure”.

The idea that it is novel for the Commons to assert its financial privilege for public expenditure as opposed to taxation is simply wrong.

That is the history, but what are the implications for today and thereafter? The position is as it was throughout the 20th century. As the Clerk of the Parliaments put it in his 2009 paper,

“until the Commons asserts its privilege, the Lords is fully entitled to debate and agree to amendments with privilege implications”.

That is what we did in this case; and were perfectly entitled to do. I vigorously defend the right of the House to ask the Commons to reflect, and indeed I did so myself in opposition.

What happens next is entirely a matter for the House of Commons, and I intend to respect the convention that the two Houses do not debate the other’s procedures. I can though direct Members of this House to the helpful memorandum by the Clerk of the House of Commons which makes clear that it is the Commons officials under the authority of their Speaker who determine whether each Lords amendment engages financial privilege before the House of Commons is invited to accept or reject each amendment. The Government have no role in this decision; and the Clerk of the Commons has made that clear.

It should not come as a surprise to anyone that in this case the Commons authorities decided that the 11 Lords amendments which we have before us today engaged financial privilege: their cumulative cost is more than £2 billion. So the idea that this was a knife-edge decision reached only after lobbying by the Government is simply implausible.

It is only after the question of privilege has been determined that the Commons considers whether to agree or disagree with each Lords amendment. If the Commons agrees, it can choose to waive its privilege. But if it disagrees, it must offer a reason, and the only reason it can give is privilege. As the Clerk of the Commons explains:

“If an amendment infringes privilege, that is the only reason that will be given. This is because giving another reason suggests either that the Commons haven’t noticed the financial implications, or that they are somehow not attaching importance to their financial primacy”.

I hope that three things are clear from that summary: first, that the scope and presence of privilege are solely for the Commons; secondly that the Government have no role in designating whether or not a Lords amendment impinges on privilege; and last, that when the Commons disagrees with a Lords amendment found to involve money, privilege is the only reason that it can possibly cite for rejecting the amendment—there is no discretion to give another reason. The whole House should be grateful to the noble Lord, Lord Martin of Springburn, who has twice in recent weeks made these very points to help our understanding.

I think that this notion of discretion is where much of the confusion lies, so I propose now to say a word about the ability of the Commons to waive its privilege. If a Lords amendment which has financial implications is within the existing Commons’ money resolution, the Commons may agree to that amendment and, in so doing, waive its privilege. But if the Commons disagrees to the amendment, the question of waiver does not arise: the Commons must give this House a reason and that reason must be a privilege reason. In other words, the designation of a Lords amendment as privileged does not preclude the Commons from accepting it. In fact, the only question for the Commons is whether to accept or reject each Lords amendment on policy grounds. If it accepts the amendment, privilege is waived; if it rejects it, privilege cannot be waived.

--- Later in debate ---

[Lord Higgins]

My Lords, it is extremely helpful of the Leader of the House to set out the position so clearly, and it is what I have always understood it to be. May I make one practical point? The amendment comes back from the other place, privilege having been claimed. The convention is that one does not send back an amendment which is likely to invite the same response. The trouble is that the simple point which is made when they claim privilege is “We can’t afford it”, and one might send back an amendment which costs somewhat less. We do not know whether they “can’t afford it” to the extent that such an amendment would be acceptable. Therefore, it may be quite reasonable for this House, if it gets back an amendment that has been rejected on grounds of financial privilege, which effectively says that we cannot afford it, to send an amendment back that would cost less than the one that was originally proposed.

[Lord Strathclyde]

My Lords, I am very pleased that I have taken the opportunity this afternoon to clarify something that I know a lot of Peers feel strongly about, particularly former Members of another place. Given that since the general election more than 100 Peers have joined this House, it is worth from time to time re-explaining some of the reasons behind the relationship that exists between the two Houses. I say respectfully to the noble Lord, Lord Morgan, with all his historical perspective, that he may well be right that it has not been a seamless web since the 17th century. But the settlement has been very much recognised and has worked respectfully between the two Chambers over the past 100 years, not least during the course of the Labour Government since 1997.

I agree with the noble Baroness, Lady Royall, as Leader of the Opposition. I understand that there has been widespread comment in legal, academic and constitutional circles, although it has not always been accurate. But I hope that part of what I have laid out today will help those outside commentators to understand the position as I see it and as I believe the House of Commons does. It is a long-standing convention, for reasons which are entirely obvious, that the two Houses do not debate each other’s internal procedures. I am not entirely sure what would be gained by having a further debate on this. After all, today we have a very full House and we have had a useful and interesting debate on this issue.

In everything that I have said and that we are doing this afternoon, there is no extension to the issue of legal privilege. As I said in my opening remarks, the situation is exactly as the noble Baroness, Lady Royall, when she was Leader of the House, laid out in 2009. Nothing has changed. That is why I join with my noble friend Lord Tyler in being somewhat bemused about the noble Baroness’s view on House of Commons privilege. I was rather hoping that she would leap to her Dispatch Box and agree with every word that I had said, at least on the basis that I had agreed with everything she had said. I am very grateful to the noble Lord, Lord Laming, the Convenor of the Cross Benches, for his important intervention.

Let me clarify one aspect of this. As the Clerk of the Parliaments put it in his 2009 paper, until the Commons asserts its privilege, the Lords is fully entitled to debate and agree to amendments with privilege implications. It is right that we should have the ability to do so, not least because it allows the Minister to give the Government’s point of view. That will continue and rightly should continue.

It is always good to hear from former Speakers of the House of Commons and I am indebted to the noble Baroness, Lady Boothroyd, who harked back to an age when there was clearly more flexibility and more discussions in the usual channels in the 1990s. Of course, my noble friend Lord Naseby explained about the ways and means.

Perhaps I may confirm to the noble Baroness that there is no threat to this House in terms of its powers and role. To respond to my noble friend Lord Fowler at the same time, the only purpose in having the Bill on reform of the House of Lords and debating that reform is that this House should be reformed only if it can be more assertive, stronger and better able to hold the Government to account and if it can challenge the views of the House of Commons. Otherwise, why on earth would we bother with all of this?

[Noble Lords]

Oh!

[Lord Strathclyde]

My Lords, my noble friend Lord Fowler, with his tremendous memory, harked back to 1986. He complained about the Commons using programme Motions more than they did in the past, and that is true, but of course it is up to them. However, I can confirm that the House of Commons discussed and debated each of these amendments in full before passing them back.

I can tell him my noble friend Lord Higgins that my noble friend Lord Freud will be able to explain the Government’s position on each of these amendments, but he will not be able to confirm what position may be taken by the House of Commons because that is a decision for the Speaker on the advice of his Clerks. However, I should like to repeat the really important thing in all this. Some 35 of the 46 Lords amendments to the Welfare Reform Bill that were designated by the House of Commons as privileged were subsequently accepted by that House. That must be an indication that we did a good job and we did it well.

I hope that I have answered all the questions put to me. If not, I shall reply in writing, but I hope that we will now be able to continue.

[Lord Stoddart of Swindon]

My Lords, I am much obliged to the Leader of the House. I do not really believe that he has dealt satisfactorily with the points raised by the noble Lord, Lord Fowler. He said that this House would be strengthened by the Bill that apparently is to come before us in the next Session, but if it does not provide the same financial powers as those of the House of Commons, we will be in no different a position from that in which we are at present, which we are discussing. Unless that Bill can be amended to give the House of Lords the power to make amendments that may indeed put up expenditure without being told by the Commons that we cannot do so, then what is the point of us?

[Lord Strathclyde]

My Lords, I have long believed that there are adequate powers in this House, many of which we do not use, partly because we are an unelected and appointed Chamber. When and if we are ultimately elected I expect that, over time, those powers will evolve. I have no idea how they will evolve, but if a Bill for an elected House is presented, this is an issue that we shall debate long and hard, and I look forward to the noble Lord’s amendments.

Motion agreed.