Cabinet ministers Louise Haigh and Wes Streeting pressed the Treasury to raise capital gains tax (CGT) before the Chancellor, John Healey, ruled it out, City AM reports, citing Treasury sources.
According to City AM, Healey refused over concerns that a rise would drive more higher earners to leave the UK. The paper says ministers including Haigh and Streeting wanted the rate raised from its current 24% for higher-rate taxpayers. That figure matches the rate given by Bloomberg and Reuters.
City AM also reports that the Treasury had already rejected calls to bring CGT into line with income tax. It gives the income tax rates as 20% for basic-rate and 40% for higher-rate taxpayers.
The paper says the decision leaves Healey with fewer ways to raise revenue, given his commitment to the Labour manifesto not to raise VAT, National Insurance or income tax.
The decision not to raise CGT was first reported by the Times. There is still no on-record Treasury statement, so it remains unconfirmed until Healey delivers the Budget on 28 October. The account of cabinet lobbying has not been independently checked.