The Watchdog of the Constitution?
The arguments over the House of Lord’s rejection in October of tax credit reductions raise questions with a long history. While commentators like the New Statesman have commented on the need to reform the Lords, which is not a democratic body, a more fundamental question is what the role of the Lords is – and whether as a revising body its powers are properly defined. Indeed, in the light of the argument over the People’s Budget of 1909 and the settlement arrived at in the 1911 Parliament Act, does the House of Lords have the power to intervene over budgetary matters decided by the Chancellor?
Until the turn of the twentieth century, the power of the Lords was largely unquestioned. As Walter Bagehot wrote in his seminal study of the English Constitution, published in 1867, the two houses were equal in status and while the Lord largely revised legislation produced in the Commons, there was no question it had veto powers. Both major parties – the Conservative and Liberals – accepted this, and drew their leaders from either of the Houses as was appropriate. There was no question the Lords was the equal of the Commons although the two Reform Acts of 1832 and 1867 had stressed that a majority of seats in the Commons decided which Party formed the government, a principle long established.
However the ability of a politician to run government from the Lords, unquestioned in the Victorian period, vanished in the Twentieth Century, Salisbury (1895-1902) for the Conservatives, and Rosebery (1894-95) for the Liberals being the last of the peers to become Prime Minister. This was less due to democratic thinking than shifts in the balance of power as the Lords became more and more a Conservative dominated body after Home Rule became the dominant issue under Gladstone
1886 – Liberals split, most Liberal Lords join the Conservatives as Liberal Unionists led by the Duke of Devonshire. From this point the Lords become partisan. Conservative laws are not scrutinised, Liberal laws are demolished.
This is shown by the Conservative dominance 1886-92, and again 1895-1905 no laws are scrapped. 1892-95 Liberal laws are scrapped notably the second Home Rule Bill which passes the Commons but not the Lords.
THE LIBERAL GOVERNMENT OF 1906-1909
Matters came to a head after the Liberal landslide of 1906, when despite a record majority the Lords mangled Liberal legislation – though favouring Labour inclined measures, a move seen as trying to weaken the Lib-Lab pact. As the Liberals could not get laws passed, they were seen as failing to carry out their manifesto. Campbell-Bannerman, the first Liberal Prime Minister in this period, warned the Lords that their partisan use of their veto powers would lead to a confrontation. As Balfour the Conservative leader, was confident in the strength of the veto that he instructed the Lords – he was himself an MP – to carry on blocking Liberal bills.
The crunch came over the Budget of 1909. Despite the veto power of the Lords, it had been accepted since the mid-Victorian period (when Gladstone had got round the veto by tacking other legislation onto the Finance Bill) that the Lords would never block the financial legislation needed annually to give the government to pay its bills – eg for the army and navy. In 1909, while Old Age Pensions alone increased the budget take which would be paid for largely by the upper classes (the working class paid relatively little tax), the biggest item increasing the tax bill was Dreadnought battleships, which the Conservatives had voted to build. When the finance bill came to the Lords, however, it was rejected. The new Liberal Prime Minister, Asquith, called an election for January 1910.
To cut a long and very acrimonious story short, Asquith could not get the bill through even after winning the first election. He had to get the King to promise to create enough Liberal peers to overcome the entrenched Conservative majority in the Lords in order to pass the bill. In the face of the threat to remove the Conservative majority, the Lords in fact passed the budget. However the Liberals were now determined that the Lords veto would go, and they would never be able to block Liberal legislation, finance bills or other bills – a Home Rule bill was due and they did not want to lose a third time.
The result was the Parliament Act of 1911 which remains the basic legislation to this day. The core is that a finance bill cannot be vetoed by the Lords, if certified as a financial act by the speaker of the Commons, while other legislation could only be delayed for two years – later reduced to one. Despite some later changes, this remains the core constitutional provision relating to the power of the Lords.
As the law removed the veto power, it was hotly resisted and Conservative peers mobilised to stop it being prepared to ‘fight to the last ditch’ to stop the Bill becoming law. In the end a minority of Tory peers willing to let the bill through rather than lose their majority of peers by a creation of a Liberal majority via the Royal Prerogative voted with the Liberal rump of peers, secured a majority, and the Parliament Act passed into law/.
While the outcome was clear, it is not clear how the Lords blocked the tax credits provision, given the Parliament Act. If the tax credits legislation formed part of the budget or were otherwise a financial provision certified by the speaker, then they had no right to veto. They clearly did have the right to amend, thus restating their traditional role of being the revising chamber – or the chamber which prevents abuses of the constitution, which was what the Liberals accused them of being 1909-11. Lloyd George, the Liberal Chancellor, accused them of being no ‘the watchdog of the constitution’ but ‘Mr Balfour’s Poodle”. This was ended by the parliament act.
It is clear that they cannot be regarded as acting for the Conservatives in this year’s controversy over tax credits. But how and why the Lords voted is, from a historical and constitutional view, still controversial. The history of the Lords veto is clearly far from resolved.
Trevor Fisher 3 11 15