The Finance Bill will enact most of the measures contained in chancellor Gordon Brown’s budget of March 21, concerning levels of income tax, corporation tax and other various fiscal measures. 

Although many tax rates (such as alcohol and tobacco duty rates) have effect prior to enactment, the Finance Act gives them their legislative authority. 

The Bill is usually considered by a committee of the whole House on various ‘controversial’ matters and then moves into a more traditional public bill committee for clause-by-clause consideration. 

The Finance Bill will be briefly debated in the House of Lords, once it completes its Commons stages, but peers do not have the power to amend Bills dealing with taxation as a result of the Parliament Acts 1911 and 1949.

During second reading the Commons, Chief Secretary to the Treasury, Stephen Timms, introduced the Bill and explained that the Bill prioritises investment and innovation, simplifies business tax and "strengthens UK leadership in climate change". 

Turning to the detail of the Bill, Timms explained that "the Bill reforms venture capital trusts, the enterprise investment scheme and the corporate venturing scheme" as well as addressing the corporation tax rate for large and small companies. 

Timms concluded his introduction by stating: "The Bill is the right next step in extending further our decade-long record of economic success, stability, growth, investment and fairness that my right hon. Friend the Chancellor set out in the Budget. It promotes the international competitiveness of the UK economy because maintaining our success on competitiveness is vital to the prosperity of every family in Britain. The Bill provides further protection for the environment to ensure not only that we stay on track to exceed our Kyoto commitment, but that we strengthen UK leadership internationally. Our aims are to build on the longest period of economic stability and sustained growth in Britain’s history, with a strong economy alongside a strong society, the right balance among tax, spending and borrowing, and Britain equipped to address successfully the long-term challenges of the future." 

The Conservative shadow chief secretary, Theresa Villiers, spoke to a Conservative amendment refusing to give the Bill a second reading on the grounds that it "fails to equip the UK to compete in the globalised world economy". 

Villers criticised measures in the Bill to increase the tax rate for small businesses and accused the Bill of being "disappointingly weak" on issues surrounding carbon emissions and climate change. Villiers concluded by stating: "the Opposition decline to give a Second Reading to the Finance Bill because it fails to equip the UK to compete in the globalised world economy in the face of ever-increasing competition from China and India; it penalises enterprise and business start-ups and imposes higher tax rates and a more complicated tax system on small companies; it hits freelance workers with more bureaucracy and uncertainty; it does nothing to tackle the UK’s worsening pensions crisis; it is ineffective in the fight against climate change; it fails to reverse the massive increase in complexity and instability that the Chancellor has inflicted on Britain’s tax system; and it implements a Budget that was a tax con, not a tax cut." 

The Liberal Democrats' shadow chief secretary, Julia Goldsworthy, focussed her comments on the changes in income tax and the abolition of the 10p starting rate which would hit the poorest paid the hardest. She welcomed the cut in corporation tax but claimed that it would paid for by changes to capital allowances and she expressed concerns that tax changes would result in small businesses paying more corporation tax. 

On the Bill's environmental credentials, Goldsworthy stated: "we have seen welcome but limited changes to vehicle excise duty, and arbitrary and very limited changes to air passenger duty. I suppose that the Bill is slightly green around the edges, but there is no clear indication that it will have a significant impact on behaviour, or that those revenues will be spent on cutting taxes elsewhere to make the system fairer. Again, that leaves the public feeling cynical. It is because the Bill is inadequate in all those important areas, and because of the technical concerns that we have raised earlier, that we are so desperately disappointed with this year’s Finance Bill." 

The Conservative amendment was defeated on division by 283 votes to 168 and the Bill was read a second time.