On Disraeli's elevation to the House of Lords as Earl of Beaconsfield in 1876, Northcote became Leader of the Conservative party in the Commons. As a finance minister he was largely dominated by the lines of policy laid down by Gladstone; but he distinguished himself by his dealings with the debt, especially his introduction of the new sinking fund in 1876, by which he fixed the annual charge for the debt in such a way as to provide for a regular series of payments off the capital.