Chancellor John Healey will not raise Capital Gains Tax in next week's Budget, rejecting calls from some Labour MPs to increase the levy, according to reporting first published by the Times.

Healey cited concern about an investor exodus. HMRC estimates show the financial case is mixed: raising the lower CGT rate by 1% could yield £5 million by 2028-9, but increasing the higher rate by 10% would reduce Treasury receipts by £3.6 billion in that same year. Behavior changes, such as people moving abroad or deferring asset sales, could further reduce revenue.

Cabinet ministers Louise Haigh and Wes Streeting both previously supported raising CGT before Andy Burnham became prime minister in July. Haigh wrote in the Renewal journal that higher CGT would "shift the taxation burden away from punishing work, and towards unproductive capital accumulation." Streeting called for a "wealth tax that works" in May, arguing that equalising CGT with income tax would address an unfair system "penalising work."

The current rates stand at 18% for basic rate income tax payers and 24% for higher and additional rate payers.

Healey signaled his position last month, stating: "I want to see this country as a country of wealth creation. I want our government decisions and policies to raise the levels of confidence, and investment, and profit in British business." He had already ruled out completely leveling CGT and income tax rates, according to reporting in the Financial Times.

Opposition figures offered contrasting views. Lord Jim O'Neill, a former adviser and Goldman Sachs Chief Economist, warned a CGT rise would send "the wrong message to business." Conservative leader Kemi Badenoch urged the government to cut spending instead, saying Labour would not "find the courage" to reduce expenditure. The Liberal Democrats proposed raising £14 billion partly through a windfall tax on bank profits.

Communities Secretary Angela Rayner declined to speculate on Budget details when asked on BBC Breakfast, noting instead that the government has taken steps to provide "breathing space" and help with the cost of living.

Healey faces limited options for raising revenue. Labour's 2024 manifesto pledged not to increase income tax, National Insurance and VAT. The government is also constrained by self-imposed debt rules. The Budget is scheduled for 28 October.