The House of Lords amended the government’s European Union Referendum Bill in order to allow 16 and 17-year-olds to vote in the referendum. Last week the Commons overturned the Lords amendments claiming ‘financial privilege’. Ahead of fresh votes in the Lords on the topic, Meg Russell and Daniel Gover explain this much misunderstood term.

Hot on the heels of the argument over tax credits, this week sees a new row over the constitutional propriety of the House of Lords challenging government policy. This time the topic is the rights of 16 and 17-year-olds to vote in the EU referendum. On 18 November the government was defeated in the Lords on this question, with peers agreeing an amendment to give young people the vote. On 8 December the House of Commons overturned this proposal, citing ‘financial privilege’ because the extension of the franchise would have cost implications. The Lords is due to debate the matter again tomorrow, and there are accusations on both sides: on one hand that the claim of Commons financial privilege is somehow improper, and on the other that it would be improper for the Lords to press the matter any further. These are murky and little-understood constitutional waters, but having specifically completed a research project on financial privilege last year, we hope that we can offer some clarity.

Since last week’s Commons decision there have been many incorrect statements about financial privilege. For example, there have been claims that ‘the government has had it declared a “financial” matter’ in a show of ‘political chicanery’ in order to ‘ra[m] its agenda through’ parliament, and that as a consequence the Lords would be ‘prevented from voting against it’ because the move ‘takes away the right of the Lords to intervene’. It is exactly these kinds of misunderstandings that our project sought to clear up: through publication of a detailed report, as summarised in a journal article and a previous post on this blog. The shortest and simplest summary of our conclusions is contained in the presentation slides for the report’s launch in the House of Lords. A key conclusion was that the rules in this area are insufficiently clear, and that they need clarification because arguments over financial privilege are likely to become more common. This week’s events appear to prove us right.

Continue reading →