John Healey risks Labour civil war as Chancellor forced to rule out capital gains tax hike amid fears of investor exodus

John Healey has ruled out a hike in capital gains tax (CGT) in his first Budget.

The decision risks the ire of Cabinet ministers Wes Streeting and Louise Haigh, who both previously called for a rise in the tax before Andy Burnham entered No10 in July.

But Mr Healey has ruled out the move after warnings that it could spark an investor exodus and hamper economic growth if wealthy people leave the country or defer selling off assets.

CGT applies to profits from selling assets like a house or shares.

Lord O'Neill of Gately, who has advised Mr Burnham and worked on the Northern Powerhouse project, told The Times: "raising capital gains tax would send very much the wrong message to business".

The biggest "revenue raiser" in the Budget is set to be Mr Healey's raid on banks - but experts have warned the move could cost the British economy nearly £20billion.

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 point to the Tories' £ 70 billion spending-cut package, including cuts to welfare and the civil service headcount, as a place to start.

A Treasury spokesman said: "As has always been the case, decisions on tax are a matter for the Chancellor to set out at fiscal events, rather than routinely commenting on rumour, speculation or proposals."

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Serious criminals detained in hospital to no longer receive benefits

Killers and sex offenders who are detained in hospital will no longer receive benefits under new proposals called for by victims' families.

The Government confirmed the move to end so-called "double provision" which enables offenders to claim hundreds of pounds a month for living costs while receiving NHS psychiatric treatment.

Proposals set to be laid in Parliament on Tuesday would close the loophole and prevent serious criminals receiving up to £800 a month in universal credit over several years.

This would save an estimated tens of millions of pounds annually.

Work and Pensions Secretary Pat McFadden said: "We said we'd act to tackle this gross unfairness and we’re delivering on that promise.

"For too long these violent criminals have had their living costs paid by the taxpayer twice over, while their victims and families paid the price.

"That ends today because victims and taxpayers deserve a system that is fair and supports only those who genuinely need it."

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