Background
Prior to the 15th century, the Lords was the stronger of the two houses of Parliament. A process of gradual evolution combined with such moments of crisis as the English Civil Wars transferred the political control of England, first from the Crown to the House of Lords and then to the House of Commons. The rising wealth of the Commons eventually allowed it to wage two civil wars, dethrone two Kings, and gradually reduce the power of the Lords. Prior to the House of Lords Act 1999 the power of the Lords had been diminished by the Parliament Acts 1911 and 1949 which stripped the Lords of the ability to block, or veto, adoption of most bills; at most it could delay bills for one year. Furthermore, the Commons has absolute power when it comes to money bills.
After eighteen years of Conservative rule, the Labour party led by Tony Blair won a landslide victory at the 1997 general election, in the process inflicting the biggest defeat for the Conservatives since 1832. The Labour Party had for years endorsed abolition of the unelected House of Lords in its election platforms, though since 1992 this had changed to a policy of reforming the House instead.
During the 20th century successive Labour governments proposed many bills that were opposed by the traditionally Conservative House of Lords. In the first year of Tony Blair's government the Lords rejected Labour bills thirty-eight times. The rejection considered the most contentious was of the European Elections Bill, which the Lords voted down five times. Blair claimed that the Conservatives were using the hereditary peers to "frustrate" and "overturn the will of the democratically elected House of Commons". Here Blair found an opportunity to implement one of Labour's campaign promises, "reforming" the Lords.
On 24 November 1998, in opening the second session of Parliament, the Queen delivered her annual Speech from the Throne; the Speech is written for her by the ruling party and outlines that party's legislative agenda for the upcoming year. In it, she suggested that her Government (i.e. the ruling Labour Party) would pursue a reform of the House of Lords. These remarks were followed by shouts of "Hear! Hear!" from supportive Labour Members of Parliament, and by similar shouts of "Shame! Shame!" from Conservative peers; such outbursts were unprecedented, for the Queen's Speech is traditionally heard by a silent Parliament.
Read more about this topic: House Of Lords Act 1999
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