Financial Privilege of the Commons helps bedroom tax become reality

A Bill containing Financial Privilege policies key to the Coalition Government’s agenda, including the £26,000 benefit cap and the Universal Credit Framework, has completed its passage through the two legislature houses and will now be considered for Royal Assent.

Passage through the House of Lords was not smooth, however, with Lord Richard Best in particular protesting against the controversial ‘Bedroom Tax’: a tax proposed to penalise working age social tenants deemed to be under-occupying their social home, with a potential loss of benefits of up to £22 a week.

Lord Best had threatened to delay the progress of the Bill by forcing a vote on whether the legislation should be amended to incorporate a commitment to hold a review of the bedroom tax after a six month period.

Just weeks before, the Lords had suffered the rejection of two proposed amendments on under-occupation under the pretext of the ‘Financial Privilege of the Commons’. Under this privilege, which has its origins in the mid 17th Century, the House of Commons claims sole rights in respect of financial legislation; applying to both public expenditure and the raising of public revenues.

For any amendment to such a Bill by the House of Lords, the Commons can ‘disagree’ and effectively reject it without feeling obliged to offer reason other than the existence of the privilege. In the case of Lord Best’s amendments, the predicted cost of reputedly around £100m caused the Commons to invoke this political trump card.

Nevertheless, Conservative welfare reform minister Lord David Freud, grandson of Sigmund, has since appeased Lord Best and his peers by agreeing that the tax on under-occupation is a big change and that research will be necessary to fully appreciate its potential impact.

He is reported to have commented:

“I am not yet in a position to provide the full details of that research project, but I can commit to bring forward fuller proposals when the regulations are debated after royal assent,”

The bedroom-tax has been perhaps the most controversial section of the Bill and has seen opposition from various sectors.

David Orr, Chief Executive of the National Housing Federation, is reported to have commented in February that not providing adequate protection to foster parents, war widows and the disabled, who he argues have nowhere else to go, will force many into poverty.

He added that the price of exempting these vulnerable groups would have been tiny, a mere fraction of the money lost through administrative errors in the social benefits system every year.

To read our previous article on underused homes and the Intergenerational Foundation report, click here.

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