Lords Commissioners of the Treasury
In the United Kingdom there are at least six Lords Commissioners of His Majesty's Treasury, serving as a commission for the ancient office of Treasurer of the Exchequer. The board consists of the First Lord of the Treasury, the Second Lord of the Treasury, and four or more junior lords acting as whips in the House of Commons[1] to whom this title is usually applied.
It is commonly thought that the Lords Commissioners of HM Treasury serve as commissioners for exercising the office of Lord High Treasurer, however this is not true. The confusion arises because both offices used to be held by the same individual at the same time.[2][3]
Strictly they are commissioners for exercising the office of Treasurer of the Exchequer of Great Britain and Lord High Treasurer of Ireland[4] (similar to the status of the Lords Commissioners of the Admiralty exercising the office of Lord High Admiral until 1964, when the Queen resumed the office). These offices (excluding Lord High Treasurer of Ireland, which went into commission in 1817) have continually been in commission since the resignation in 1714 of Charles, Duke of Shrewsbury, who was appointed to the office by Queen Anne on her deathbed.[5]
Until the 19th century, this commission made most of the economic decisions of Great Britain (England, before the Act of Union 1707). However, starting during the 19th century, these positions became sinecure positions, with the First Lord serving almost invariably as Prime Minister, the Second Lord invariably as Chancellor of the Exchequer, and the junior lords serving as whips in Parliament.
As an office in commission, technically all Lords Commissioners of the Treasury are of equal rank, with their ordinal numbers connoting seniority rather than authority over their fellow Lords Commissioners. However, from at least the reign of Queen Anne, de facto power has rested with the top-numbered Lords.
Of all the Lords Commissioners of the Treasury, typically the only one who actually works in HM Treasury is the Second Lord, as Chancellor of the Exchequer. Since the formation of the office of Prime Minister (including in the case of Sir Robert Walpole as the inaugural holder), it has been typical for the incumbent to assume also the position of First Lord of the Treasury.
None of the other lords of the Treasury work for the Treasury in a substantive sense. Rather they are government whips, given nominal positions in the Treasury to enable them to be suitably remunerated for facilitating the function of His Majesty's Government. The Commission of the Treasury is suitably flexible for the government's whip operation because it has no fixed number of office-holders. However, the Chief Whip is not personally a lord of the Treasury, instead having the similar, but discrete, position of Parliamentary Secretary to the Treasury, which is also a sinecure used to procure paid membership among the members of the Government.
The lords of the Treasury nominally head HM Treasury. They do so by virtue of office and as a matter of law, acting in the office of Treasurer of the Exchequer. The Chancellor does so in reality, consulting the Prime Minister, and delegating parliamentary-level work to the other ministers in the Treasury, none of whom are Lords of the Treasury, who negotiate and formulate the rest of Treasury business. These junior ministerial positions are, in descending order of rank:
Relationship between the First and Second Lords[edit]
Historically, the Chancellor of the Exchequer was also the First Lord of the Treasury, and usually by extension Prime Minister as well. However the increasing sophistication of government spending led to the development of the chancellorship into a more refined position of finance minister, and so gradually particularised the office in a way less suitable for headship of the ministry overall. The last Chancellor-Prime Minister was Stanley Baldwin in 1923, and then only very briefly – the last substantive overlap was William Gladstone in 1880–1882.
A more immediately significant trend though was the rebalancing of the powers of the Houses of Parliament in favour of the lower house. From the Glorious Revolution and onwards it had become increasingly constitutionally untenable for the person setting fiscal policy (i.e. the Chancellor) to reside in the House of Lords, a principle which was embedded permanently in the constitution from 1718 with the resignation of Lord Stanhope (note this excepts the brief tenures of certain Lord Chief Justices, who historically assumed the office of Chancellor of the Exchequer pro tempore during vacancies, and who were often peers). That notwithstanding, the constitutional convention mandating that the Prime Minister reside in the Commons became embedded much later, with a Prime Minister serving without difficulty from the Lords as late as 1902. That Alec Douglas-Home, the last to assume the Premiership from the Lords in 1963, felt compelled to disclaim his peerage and take up a seat in the Commons shows that the convention had, by that time, become well-entrenched.
Throughout the eighteenth and nineteenth centuries Prime Ministers would continue to be drawn regularly from the upper house. In circumstances where the Prime Minister was a peer it was felt appropriate for the head of the ministry overall to take the primus inter pares position on the commission as First Lord, even if through constitutional convention he couldn't serve as the Chancellor, who was otherwise First Lord by virtue of his office. The office of First Lord thus became strongly intertwined with the (legally non-existent) Premiership was particularly strong because all Prime Ministers up to Lord Salisbury, apart from Lord Chatham, had been First Lords. Accordingly, when the Prime Minister sat in the Lords, the Chancellor assumed the Second Lordship. The constitutional entrenchment of this principle began in 1841 with the appointment of the Second Peel ministry. Being a viscount, Lord Melbourne (the outgoing Prime Minister) had not been able to be Chancellor as well, but nevertheless assumed the First Lordship pursuant to his premiership in the usual way for premiers from the peerage. However, when Sir Robert Peel returned to office for his non-consecutive second term he elected to be First Lord of Treasury, a title he had naturally assumed in his first ministry wherein he had also served as Chancellor. But despite being a Member of Parliament (i.e. not a Lord), Peel did not assume the Chancellorship. Thus the Chancellor, Henry Goulburn, became the first Chancellor to be Second Lord of the Treasury whilst the First Lord was also in the Commons. From that point onwards, the Second Lordship, save on the rare occasion that the Prime Minister holds both 10 and 11 Downing Street, has been permanently vested in the Chancellor.