Finance Bill: Second Reading

The House of Commons passed the Second Reading of the Finance Bill on 27 November 2024 by 332 votes to 176. Second Reading is the stage at which MPs vote on the general principles of a bill rather than its detailed provisions. The bill gives effect to the October 2024 Budget delivered by Chancellor Rachel Reeves, covering a wide range of tax changes including higher Capital Gains Tax rates, abolition of the non-domicile tax regime, the removal of VAT exemption for private school fees, an increased energy profits levy, and a new duty on vaping products. The vote matters because it cleared the bill's first major parliamentary hurdle, allowing it to proceed to detailed scrutiny. The measures it contains have direct financial consequences for a wide range of people and sectors: investors and business owners face higher CGT rates from 30 October 2024 onwards; long-term UK residents who previously used the remittance basis will move to a new residence-based regime from April 2025; independent schools will charge VAT on fees; and oil and gas companies operating in the North Sea face a higher levy rate. Together, these changes form the fiscal core of the government's plan to raise revenue and reduce borrowing. The vote divided almost entirely along party lines. All 325 Labour and Labour and Co-operative MPs who voted backed the bill; all 96 voting Conservatives, 57 Liberal Democrats, 9 SNP members, 7 Reform UK members, 2 DUP members, and 1 Traditional Unionist Voice member opposed it. The four Green MPs voted with the government, and two independents also voted aye. There were no notable cross-party rebellions. The opposition's case centred on growth concerns and the effect of the energy levy on North Sea investment, while the government framed the bill as necessary repair of inherited public finances.