It’s not necessarily game over for welfare reform resistance, after all

We were told the welfare reform fight was over, that the government's cynical use of the rulebook meant further resistance by the Lords was futile. It's now becoming clear that is far from the case.

By Alex Stevenson

Commons officials have been explaining today the rules surrounding financial privilege – an assertion of the Commons' primacy when it comes to anything involving the spending of taxpayers' money. It's not quite as was reported, that's for sure.

After employment minister Chris Grayling used financial privilege during last week's welfare reform debate. Labour kicked up a stink, attacking the government for hiding behind parliamentary procedure to get their way. Was this entirely accurate? Far from it.

Even before the debate began Commons officials had confirmed the Lords amendments held financial implications. When that decision is taken the only official reason the Commons can then vote down the amendments is because it infringes financial privilege, regardless of the actual substance of the disagreement. Financial privilege doesn't have any meaning as a reason for the dispute, therefore – it's just what gets scribbled down in parliamentary procedure.

Why bother with it, then? Well, it does limit the Lords' options. Without financial privilege the process of ping-pong, when the legislation transfers between the two Houses, can continue as the area of disagreement narrows. But with it, peers are restricted by convention.

If they simply vote to reassert their position, the bill moves close to 'double insistence' – a clash of wills which kills the entire legislation.

So it's usually more productive to propose fresh amendments which, even if they are identified by officials as having financial implications, could be accepted by ministers. After all, over the last three years 223 out of 266 Lords amendments with financial implications have been accepted by the government. It's a question of politics, not the rules.

Even the 'conventions' are there to be broken, the clerks are suggesting. "Whether the Lords try again is a matter for their interpretation of the convention that they should not send back an amendment that 'invites the same response'," a note issued by the clerk of the Commons and the clerk of legislation says. "If the Lords send back amendments, the Commons will consider them."

Resistance to the welfare reform bill could continue, therefore. Welfare reform campaigners shouldn't be giving up just yet.

This leads to the question of whether the opposition's financial privilege protestations were nothing but a smokescreen.

Labour's position was deeply uncomfortable last week. I'm told when David Cameron demanded in prime minister's questions that Ed Miliband simply nod to confirm the opposition's voting intentions, the reason Miliband and co simply stared back was because they had not yet worked out which option would be more damaging. Issues like the benefit cap left the opposition facing a risk of being defenders of benefit claimants receiving massive payouts – a definite vote-loser. Hence the frustration of campaigners with the opposition's equivocal approach to welfare reform which I encountered when I spoke to them in parliament last week.

How will those campaigners feel when they discover the financial privilege play is not 'game over'? Are Labour peers prepared to press on with the fight, after all?