Chancellor John Healey has reportedly decided not to increase capital gains tax in his first budget, which is set to be delivered a week tomorrow. This move follows earlier suggestions that a capital gains tax hike was considered a potential method for raising revenue, with some senior cabinet figures reportedly advocating for it.
According to reports, the Chancellor ruled out the tax increase due to concerns it could lead to wealthy individuals leaving the UK or deferring asset sales, potentially costing the government money. Instead, the primary revenue-generating measure in the budget is expected to be a tax on banks, which will reportedly help fund a targeted and temporary package of support for the cost of living.
The budget is also expected to see a reduction in the government's fiscal headroom, from £23bn to approximately £15bn. Conservative leader Kemi Badenoch is scheduled to give a speech today, where she will reportedly claim that Healey's budget will be more damaging than previous budgets delivered by Rachel Reeves, due to a perceived lack of spending cuts.