Chancellor John Healey has rejected calls to hike capital gains tax at the Budget, amid concerns it could hamper economic growth.
Several prominent Labour voices have called in recent months for a rise in the tax, which applies to the profit made from selling off assets like a house or shares.
Cabinet ministers had urged a rise
Cabinet ministers Wes Streeting and Louise Haigh both spoke of raising capital gains tax over the summer before Andy Burnham became Prime Minister.
But Mr Healey has ruled out the move after warnings it could end up costing the Government money if wealthy people leave the country or defer selling off assets, according to the Times.
Business warning over the tax
Lord O'Neill of Gately, who has advised Mr Burnham and worked on the Northern Powerhouse project, told the newspaper that “raising capital gains tax would send very much the wrong message to business”.
The biggest revenue raising measure set to be in the Budget is an increase in the rate banks pay on their profits, widely reported across the media last week. That is expected to fund cost-of-living support for households and businesses.
Budget outlook and opposition response
The Chancellor has acknowledged that Britain finds itself in a “tough” position ahead of the Budget, and is reported to be downplaying the prospect of major revenue-raising measures in his October 28 statement.
Conservative leader Kemi Badenoch is meanwhile due to warn the Government to slash its spending plans, and reduce its borrowing at the Budget. In a speech on Tuesday, she will urge Mr Burnham and his Chancellor to “live within our means”, and signpost the Tories’ package worth £70bn of cuts to spending – including to welfare and the civil service headcount – as a place to start.
Pre-Budget polling by Ipsos has meanwhile revealed that the majority of the public have a mixed opinion of the Chancellor, as 67% of them believe he is doing neither a good nor bad job. The survey of 1,077 Britons carried out between October 9 and 12 also found that 65% of the public is expecting some form of tax rise at the Budget.
