How The Finance Bill 2016 Became an Act

In mid-September, the Finance Bill 2016 received Royal Assent and became an Act of Parliament. This article discusses the process of a bill becoming law – from proposal stage to Royal Assent stage.

On the 15^th September, the Finance Bill 2016 received Royal Assent and became an Act of Parliament meaning that the proposals announced in the Budget 2016, the autumn statement and the summer budget of 2015 were approved by the Queen.

From Proposal Stage to Royal Assent Stage

A bill is a proposed law and starts in the House of Commons or the House of Lords but has to be approved by both Houses before becoming law.  We thought we would have a quick look at the process from proposal stage to Royal Assent stage.

Assuming the bill starts in the House of Commons, there is firstly a formal introduction and ‘first reading’.

The bill is then published as a House of Commons paper and has a second reading where MPs from both sides debate the content – this would normally happen about a week after the first reading.

At the end of the debate, the Commons vote on whether the bill can proceed to committee stage; at this point, each clause of the bill is debated in detail.  At this stage, if the bill started in the Commons, the committee can take opinions and views from external experts.

Each clause in the bill is either agreed, changed or removed.  From committee stage, it goes to report stage where the amended bill can be further debated and amendments proposed.

Report stage is normally followed immediately (usually the same day) by the bill’s third reading, which is the last chance for the Commons to debate.

Amendments cannot be made at third reading in the Commons, and at the end of the debate, there is a vote for approval.

It then goes to the House of Lords, who follow the same process with the first reading, second reading etc.  Unlike the House of Commons, though, amendments can be made at the third reading in the House of Lords as long as the issue has not been fully debated and voted on during either the committee or report stage.

If the bill began in the Commons, it is sent back after the Lords’ third reading for them to consider any amendments.  Once the Commons and Lords agree on the final version of the bill, it can receive Royal Assent and become an Act of Parliament.

What Made Law

Originally The Finance Act 2016 was made up of 13 parts, 191 provisions and 25 schedules – in total 649 pages.  No wonder it takes time for it all to be debated and agreed.  A lot of what finally made law was expected, ie the dividend allowance, personal savings allowance, lifetime allowance for pensions – all of which took effect from April 2016.

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