Lords powerless after this lot ultimately forming government (8)
I believe the answer is:
steerage
'government' is the definition.
(I've seen this before)
I cannot understand how the remainder of the clue works.
Can you help me to learn more?
(Other definitions for steerage that I've seen before include "It's the cheapest way to go by sea" , "Cheapest part of passenger ship" , "space on vessel" , "Cheap seats" , "Cheapest accommodation in old passenger ships" .)