Finance (No. 2) Bill Report Stage: Amendment 5

Parliament voted on 11 March 2026 to reject Amendment 5 to the Finance (No. 2) Bill at report stage, defeating a Conservative proposal that would have prevented income tax thresholds from remaining frozen at their current levels until 2030. The amendment fell by 283 votes to 172, a majority of 111 against. The freeze on income tax thresholds means that as wages rise, more taxpayers are pulled into higher tax bands even without any explicit rate increase, a process known as fiscal drag. Amendment 5 sought to end this freeze early. The government argued, citing figures certified by the Office for Budget Responsibility, that reversing the freeze would cost around £12 billion in the fiscal year relevant to its borrowing rules and would put public finances and public service funding at risk. Supporters of the amendment described the freeze as a real-terms tax rise falling on working families. Every Labour and Labour and Co-operative MP who voted sided with the government against the amendment. The Conservatives, Liberal Democrats, Reform UK, Plaid Cymru, the Greens, and the Democratic Unionist Party all voted in favour. The SNP did not vote on this amendment, with a Scottish National Party member explaining from the floor that income tax thresholds are a devolved matter and the party would not participate. The vote sits within a broader pattern of the government using its Commons majority to hold its tax and spending plan together, having also defeated Lords amendments to the National Insurance Contributions (Employer Pensions Contributions) Bill on 23 March 2026 across five separate divisions.