Here in the UK we have a deficit and the Tories thought they had won the argument about how to reduce it. Until last week that is, when George Osborn’s plans to cut tax credits for the working poor met defeat in the House of Lords.
Of course, though he has lost a battle, albeit a major one, he hasn’t lost the war. Predictably, he and his supporters have tried to define the issue as an uppity unelected chamber thwarting the democratic will of the Commons. Hence the tedious talk about whether the Lords’ move was constitutional. Given that the UK does not have a written constitution, this debate is bound to be a sterile one. And anyway Osborne and his apologists cannot see the wood for the trees. They are missing the wider issues of principle this defeat raises, issues that won’t cease to dog the Chancellor even if he manages to force through the cuts tomorrow.
For the government, it’s about legitimacy and the right to do what people elected them to do. Of course, not all people voted for them but the fact remains the Commons are elected and the Lords are not. This means that they are limits to what the Lords can do by way of blocking the will of Commons. This holds true even though the Tories’ Commons’ majority is based on winning around a third of popular vote (and a lesser share of the country as a whole) at last May’s General Election. Despite this, the Tories still have a mandate to govern. They can only be denied this carte blanche if it can be shown that the Tories’ victory in May 2015 was somehow stolen from the deserved winner and/or that the voters generally were not offered a genuine opportunity to throw them out. No, the Tories won fair and square in May 2015 so have a right to set the agenda and govern by it.
Having said that, a democracy, if it is to ensure competing interests are reconciled fairly, must reconcile the losers to the result. Just because the Tories won in May 2015, they do not have licence to do whatever they like. This observation is hardly new – it is expressed in the phrase ‘checks and balances’, and well-governed democratic systems allow mechanisms like an independent judiciary or a second chamber to prevent majoritarian – but democratic – tyrannies from developing. The House of Lords can indeed make just such an argument to justify why it did what it did. If the Tories cuts to tax credits are unfair, then the Lords can act to check them, even if they have been democratically endorsed by the first chamber.
Are the cuts unfair? Without doubt they are. They will make the working poor worse off. The highly respected Institute of Fiscal Studies calculates that 13 million families will lose an average of £260 a year as a result of just one measure, extending the freeze in working age benefits, tax credits and local housing till 2020. By 2017, this means that most benefit rates will have fallen back behind their 2008 levels, compared to price inflation and earnings growth. Cuts to Universal Credit will leave 3 million families £1,000 a year worse off. This is a big deal – the families affected are among the lowest paid, earning below the average national salary. The government has claimed that increases in the living wage will compensate for these losses. But the IFS has found that gross increase of £4 billion in the living wage will not cover for the fall of £12 billion in tax credit and other related cuts. ‘Unequivocally’, the IFS concludes, ‘tax credit recipients in work will be made worse off by the measures in the [July 2015] Budget on average’.
If that is not fair then I don’t know what is. The Lords, in rejecting Osborne’s proposed cuts as they currently stand, have done a great democratic service. They have spoken for the millions of people whose interests the government is simply riding over roughshod. It’s not just about the tax credit cuts. The whole burden of deficit-reduction is being imposed on the poor. Cameron once claimed that we were all in together, when it came to reducing the deficit. That’s simply nonsense. While the government tries to snatch tax credits from the working poor, it is handing out perks to the rich like cutting inheritance and corporation taxes.
This argument is not just about constitutional procedure but about the wider principles of fairness that democracy should protect and promote. The broader significance of the Lords’ vote is that it is an expression of deep unease about how the Tories are spreading the burden of reducing the deficit and this extends well beyond the Lords. This disquiet about the cuts is not just confined to the usual suspects on the liberal-left. The free market think tank, the Adam Smith Institute, opposes them. Discontent has spread to government ranks. Twenty Tory MPs, five of them from 2015’s intake, have spoken out against them. The Sun, usually a government cheerleader, has described the cuts as bonkers. No wonder the government wants the debate to focus on procedure, the form of democracy, but not the principles expressed, the content of democracy.
How will the Tories respond? I suspect that the Tories are not going to seek to embark on any major constitutional reform. They are not showing much appetite for that. Instead, ways will be found to overcome the Lords’ resistance. In doing this, the government will kill two birds with one stone: to make the House of Commons and de facto unicameral legislature but without having to undertake any major constitutional reform to do that.
Were it to succeed in doing this, then British democracy will be weaker because of it. Government power will be subjected to weaker checks on its powers. The Commons alone is too weak to do this. The contention that once legislation has cleared the Commons then no further argument is required because the necessary democratic safety-testing for fairness and moderation have already been made is a debatable one. It is also perfectly possible to pass legislation that meets a democratic test but fails on other considerations which are just as essential to the proper functioning of a democracy.
As it stands, we do not have a unicameral legislature; the second, unelected chamber, for all its faults, is not meant to rubber stamp the first, elected chamber. If we are to have a second chamber, then it must be allowed some power to check the first one. Not for nothing did the Lord Hailsham caution against a drift toward an ‘elected dictatorship’ and it was an overbearing executive with weak parliamentary checks he was thinking about when he said that. The Lords’ vote last week means that we have taken one step away from that grim outcome. That is good for democracy. Three cheers for the House of Lords.