Money Bills and Commons Financial Privileges - Constitution Committee Contents


Paper deposited by the Clerk of the Parliaments in the Library of the House, February 2009


1.  Modern practice in respect of Commons financial privilege is based upon resolutions of the Commons passed in the late 17th Century. In 1671, the Commons resolved "that in all aids given to the King by the Commons, the rate or tax ought not to be altered by the Lords". A more broadly drawn resolution of 1678 effectively asserts the Commons' sole right in respect of all legislation with financial implications.

Bills of aids and supplies

2.  The most significant consequence of the Commons' assertion of financial privilege is that bills of aids and supplies ("supply bills"), including the Finance Bill and the Consolidated Fund Bills, which deal with taxation and Government spending respectively, originate in the Commons, and are not amended by the Lords. These bills are identified by a special enactment formula.

Money bills

3.  Under the Parliament Act 1911, if the Speaker of the Commons has certified a bill as a "money bill"—that is a bill whose only purpose is to authorise expenditure or taxation or the granting or raising of loans and matters incidental to those subjects—it may be presented for Royal Assent a month after being sent to the Lords, whether the Lords has passed it or not. In practice, the Lords does not amend money bills, and no money bill has ever been presented for Royal Assent under the Parliament Act.

4.  Although there is a large degree of overlap between supply and money bills, a supply bill need not be a money bill, and vice versa.


5.  The practice of "tacking" onto supply bills provisions unconnected with the grant of supply, in order that the Lords should not be able to amend those provisions, was condemned by this House in a resolution of 1702, which is now enshrined in Standing Order 53:

The annexing of any clause or clauses to a Bill of Aid or Supply, the matter of which is foreign to and different from the matter of the said Bill of Aid or Supply, is unparliamentary and tends to the destruction of constitutional Government.

6.  It has recently been suggested that if privilege is cited where none really exists, the House may need to renew the 1702 resolution. The complaints about the Commons use of privilege reasons at the end of the last session was not related to "tacking", which could arise only on a supply bill. The last occasion on which "tacking" was invoked by the Lords to reject a Commons bill was in 1807. No complaint of "tacking" in more recent times has been upheld.

7.  The conventions surrounding Commons financial privilege in respect of supply bills and money bills, including the avoidance of "tacking", are well understood and unchallenged.

Other bills

8.  This note is mainly concerned with financial privilege as it applies to public bills in general. In practice, privilege issues normally arise only on Government bills.

9.  Such bills often make significant changes to public expenditure, and may affect national or local taxation or national insurance. They can start in either House, and Commons financial privilege can be invoked in respect of Lords starters or Commons starters. A Lords private member's bill raising privilege issues would normally be blocked before it reached the point at which the Commons would formally invoke financial privilege.

The scope of Commons financial privilege

10.  Privilege applies both to public expenditure and to the raising of revenue to meet that expenditure. The word "charge" is used in this note to refer to both taxation and expenditure.

11.  The Commons take a wide view of matters which they consider infringe their privilege. These may include the imposition or increase of a charge, any alteration of the amount or duration of a charge, and any change in the administration of the charge. "Administration" may include modes of assessment, levy, collection or management of the charge, and any alteration in procedural matters connected with the charge. The recent discussions on the Planning Bill suggested that a change in the parliamentary procedure for making Statutory Instruments with financial implications constituted a change in the administration of a charge, and was therefore a matter over which the Commons could claim privilege.

"Unwaivable" and "waivable" privilege

12.  If a Lords amendment is not "covered" by the money or ways and means resolutions passed at the beginning of a bill's passage through the Commons, it will be summarily rejected by the Commons, on the instruction of the Speaker, and will not be considered. This is sometimes referred to as an assertion of "unwaivable financial privilege". The Companion states that it is "unprofitable" for the Lords to make amendments of this kind, unless the Lords has reason to believe that the Commons will pass any necessary resolutions.

13.  When, however, the Lords make an amendment which has financial implications but which is within the money or ways and means resolution, the Commons may agree to it. In such cases, the Commons' Votes and Proceedings make it clear that the Commons' claim to financial privilege was waived. This is referred to as "waivable" privilege. The Speaker advises the House, before it considers the Lords amendments, which amendments involve financial privilege.

Privilege reasons

14.  When the Commons rejects a Lords amendment without offering an alternative, it gives a reason for doing so. Where privilege is involved, the reason always concludes with the words "and the Commons do not offer any further reason, trusting that this will be deemed sufficient". In the Commons' view, therefore, the matter should not be further debated between the two Houses, but should be regarded as settled. The first part of the reason varies from case to case but examples include:

"because it alters the rate or incidence of taxation",

"because it would impose a charge on the public funds",

"because it would alter the financial arrangements made by the Commons".

The reasons are proposed by the "reasons committee" and are agreed to by the Commons.

Options open to the Lords following receipt of a privilege reason

15.  If the Commons have rejected a Lords amendment with a privilege reason, the options open to the Lords are limited. They cannot insist on their original amendment. It is possible to send back an amendment in lieu, although the recent Joint Committee on Conventions has stated that it is "contrary to convention to send back an amendment which clearly invites the same response[14]".

Recent criticism of claims of financial privilege

16.  Recent debates, in particular on the Planning Bill, have included negative comment on the Commons practice of using privilege reasons, and there have been suggestions that privilege is being claimed as a way of avoiding debate on substantive issues. This claim is not new, and it is difficult to say whether the use of privilege reasons is increasing or whether they are being applied to amendments which would not previously have attracted a claim of privilege. It may also be the case that there has been an increase in the number of provisions relating to charges. The scope of financial privilege is a matter for the Commons, and it is clear from Erskine May that matters which are potentially regarded as privileged range very widely indeed[15]. Points which have emerged from discussions on the Planning Bill are that—

(i)  where several Clauses, taken together, provide for some new financial arrangement, the Commons may regard an amendment to any part of that structure as something which can lead to an assertion of privilege; and

(ii)  any change of parliamentary procedure for secondary legislation making financial arrangements (changing negative to affirmative, or making Commons-only instruments bicameral) will probably be regarded as a privilege issue.


17.  The issue of packaging of Lords amendments in the House of Commons was also raised at the end of last session. For the avoidance of doubt, this is an entirely separate issue of "ping-pong" procedure. The amendments rejected by the Commons with privilege reasons were single amendments dealing with well-defined issues, so "packaging" was irrelevant to the fate of these amendments. There was certainly no suggestion that the Commons was conflating amendments raising privilege with other amendments, in order to "shelter" non-privilege amendments under a privilege reason.

18.  In conclusion, it may be worth making two points:

  • First, until the Commons asserts its privilege, the Lords is fully entitled to debate and agree to amendments with privilege implications.
  • Second, the critics of the Commons' claim of privilege may have misunderstood the extremely broad scope of the matters which the Commons has over a long period regarded as privileged.

19.  In the last analysis, the scope and application of financial privilege is for the Commons alone to determine.

Michael Pownall, Clerk of the Parliaments, February 2009

14   Report of the Joint Committee on Conventions of the UK Parliament, Session 2005-06, HL Paper 265-I, para 252. Back

15   Extract from Erskine May, 23rd edition, p.920:

"With regard to the charges in respect of which they claim privilege, the Commons treat as a breach of privilege by the Lords not merely the imposition or increase of such a charge but also any alteration, whether by increase or reduction, of its amount or of its duration, mode of assessment, levy, collection, appropriation or management; and in addition, any alteration in respect of the persons who pay, receive, manage, or control it, or in respect of the limits within which it is leviable." Back

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