Finance Bill Committee: New Clause 2

On 10 December 2024, the House of Commons, sitting as a Committee of the whole House, voted on New Clause 2 to the Finance Bill. The new clause would have required the Chancellor to publish, within six months of the Act passing, a report setting out the fiscal impact of changes to the Energy Profits Levy investment expenditure relief contained in Clause 16. The motion was defeated by 350 votes to 74. The Energy Profits Levy (sometimes called the windfall tax) is the additional tax charged on the profits of oil and gas companies operating in the North Sea. Clause 16 of the Finance Bill made changes to investment expenditure relief within that levy, specifically abolishing the core investment allowance that had previously allowed oil and gas companies to offset a substantial portion of their spending against the levy. New Clause 2 would not have changed the policy itself but would have required the government to formally assess and publish the revenue consequences of that change. By voting it down, the government kept the changes in place without being legally required to produce that specific fiscal report. The practical consequences of the underlying policy are significant for the North Sea energy sector, with industry bodies warning of job losses and reduced capital investment, particularly in Scotland. The 74 votes in favour came predominantly from the Liberal Democrats (65 votes), with additional support from Plaid Cymru, the Greens, the Alliance Party and the Ulster Unionist Party. Labour and Labour Co-operative MPs voted uniformly against, providing the bulk of the 350 no votes. The Conservatives, despite being the official opposition, were entirely absent from this division, meaning the only substantial opposition voices in the lobby came from smaller parties. The vote sits within a wider legislative process: the Finance Bill subsequently passed its Third Reading in March 2025 by 339 votes to 172, suggesting the government's Budget tax measures remained broadly intact throughout.