Budget rebellions remain scarce

Ed Lowther
BBC Parliament

The backbench revolt that flared up over the Budget has been extinguished.

The Rooker-Wise amendment is a rare example of direct backbench influence on the Budget

Government concessions to MPs worried about the impact of the Budget on some of the country's poorest people have led Frank Field to withdraw his amendment to the Finance Bill.

But governments have not always managed to placate disgruntled backbenchers - on just a handful of occasions, MPs have significantly altered the terms of government Budgets.

The most recent time that a Budget was amended in a Commons vote was in 1977.

At the time, inflation was spiralling upwards but income tax brackets were static.

Therefore wage increases in line with inflation meant that people would have to pay more tax.

Labour MPs Jeff Rooker and Audrey Wise persuaded their party's whips to put them on the committee that was to scrutinise the Finance Bill that year.

The pair then proposed that income tax brackets should be index-linked - meaning they would also rise in line with inflation.

The Rooker-Wise amendment secured the support of Conservative whip Nigel Lawson and was passed, resulting in an embarrassing defeat for the Callaghan government.

Climb-down

In 1981, Conservative chancellor Geoffrey Howe proposed that tax on ordinary diesel (derv) should be increased by 20p per gallon.

Back to the drawing board: Geoffrey Howe in 1981

But Conservative MP Trevor Skeet tabled an amendment that this increase should be halved to 10p per gallon.

Skeet argued in a Commons debate on 30 April 1981 that the Budget would have a detrimental effect on "the distribution cost of many commodities, ranging from food for livestock to beer and petrol".

As cross-party support for the plan mounted, the government dodged a vote on the issue by incorporating Skeet's amendment into the Finance Bill.

The revised Finance Bill compensated the exchequer's estimated £85 million lost revenue by imposing higher tax on cigarettes and gambling.

Inscrutable?

For some, the rarity of these cases indicates that government Budgets are not subject to sufficient scrutiny.

The House of Commons has neither the time nor the expertise nor, apparently, the inclination to undertake any systematic or effective examination of [the Budget] The Tax Law Review Committee

According to Parliamentary tradition, the House of Lords cannot amend the Finance Bill.

But the lower chamber may not be well-equipped to handle the task alone.

Howard Flight, a Conservative MP who was ousted in 2005 for claiming that his party would make more budget cuts than they admitted if elected, protested in 2003 that MPs were hampered by the timetabling of the Finance Bill.

"In our view, a quite insufficient and unacceptable amount of time is being given to the Committee stage, which will result in bad law, damage to business and damage to jobs," he claimed.

However, Commons scrutiny may be limited by more than just timetabling.

The Tax Law Review Committee once alleged that "the House of Commons has neither the time nor the expertise nor, apparently, the inclination to undertake any systematic or effective examination of whatever tax rules the government of the day places before it for its approval".

The decision to abolish the 10p rate of income tax this year was approved in the Commons without significant opposition in 2007.

Some MPs claim not to have realised the impact of the government's tax reforms until recently.

But this argument can only corroborate the view of the Tax Law Review Committee.

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