Finance Bill: Third Reading

Parliament passed the Finance Bill at its Third Reading on 3 March 2025, by 339 votes to 172. The Bill gives legal effect to the measures announced in the October 2024 Budget, including increases to capital gains tax, changes to inheritance tax relief, higher business rates for certain sectors, VAT on private school fees, and an increase to the energy profits levy on oil and gas companies. Third Reading is the final stage in the House of Commons before a bill moves to the House of Lords, and a successful vote at this stage represents full Commons approval of the legislation. The Finance Bill translates the Government's tax and spending decisions into law. Its passage means that higher rates of capital gains tax, revised inheritance tax thresholds affecting family businesses and farms, and the removal of VAT exemptions for private schools will all come into force. The energy profits levy on North sea oil and gas producers rises to 78% in headline terms, with investment allowances removed. These measures raise revenue intended to fund public services, including a stated commitment to invest in special educational needs provision and affordable housing. The changes affect a wide range of people: small business owners, farmers, parents with children in private schools, pensioners, and workers in the energy sector. The vote followed strict party lines. All 331 Labour and Labour and Co-operative MPs present voted in favour. Conservatives, Liberal Democrats, the Scottish National Party, Reform UK, Plaid Cymru, and the Democratic Unionist Party all voted against. The Green Party's four MPs voted with the Government. There were no notable rebels on either the Government or opposition benches. The Conservatives framed the Bill as damaging to growth, citing falling Bank of England forecasts and rising unemployment. The Liberal Democrats focused on the absence of impact assessments for measures affecting small businesses and private school pupils with special educational needs. The Bill sits within a broader legislative push that also includes the Non-Domestic Rating (Multipliers and Private Schools) Bill, which cleared related Commons votes in late March 2025.