Blair’s think tank warns Burnham against capital gains tax hike
Sir Tony Blair’s think tank has warned Andy Burnham against “taxing our way to prosperity” with a capital gains tax hike.
Makerfield MP Mr Burnham, widely expected to replace Sir Keir Starmer as prime minister in a matter of weeks, has faced calls to equalise capital gains tax with income tax to raise revenue.
But that would be “terrible policy” which would “send entirely the wrong signal” to entrepreneurs needed to drive innovation and growth, according to The Tony Blair Institute for Global Change.
Capital gains tax is a levy on the profits made after selling investments or assets, such as second homes or shares.
The annual amount of profit taxpayers can make before owing tax is £3,000, with anything above this taxed between 18% and 24%.
Bringing that in line with the three bands of income tax rate – 20%, 40% for higher rate taxpayers and 45% for additional rate taxpayers – could raise £12 billion a year, according to the Centre for the Analysis of Taxation.
But Guy Ward-Jackson, a senior analyst at Sir Tony’s institute, warned against giving the UK the highest top capital gains rate in Europe at 45%.
“While everyone else is racing to attract entrepreneurial talent, we would be punishing them and making ourselves poorer as a result,” he wrote in The Telegraph, in an article Labour former prime minister Sir Tony is reportedly understood to back.
“To be a prosperous country, Britain sorely needs long-term investment and the willingness to back new businesses, technologies and ideas.
“We must be a place where entrepreneurs feel they can take risks, build companies, and be rewarded for it – all the while contributing to jobs and growth.
“Increasing capital gains tax to the level of income tax would undermine those incentives and send entirely the wrong signal.”
Mr Ward-Jackson argued the UK’s “economic problem is, at its core, a risk-aversion crisis,” with capital gains tax relief “one of the few mechanisms that helps correct” UK founders’ disadvantage compared to their American counterparts, acknowledging “that investing or building a start-up means taking a huge risk and waiting years for a return”.
Mr Burnham, in his first interview since Sir Keir announced his resignation, said there was room for movement on tax despite pledging to keep Labour’s 2024 manifesto commitments not to increase workers’ income tax, national insurance or VAT rates.
The MP, who once served in Sir Tony’s government, told LBC there was room within the manifesto’s restrictions to increase taxes on warehouses to help high street businesses such as pubs.
Former health secretary Wes Streeting, who is tipped for Mr Burnham’s Cabinet after giving up his own leadership ambitions to back him, has called for capital gains tax to be aligned with income tax, alongside measures to protect real entrepreneurs.
Top Burnham backer Louise Haigh has also said capital gains tax should be brought closer to income tax rates.
Mr Burnham’s team has been contacted for comment.
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Same Blair fronting for Isreal and Trump.
Get lost Blair.
Your obsession with Israel is obnoxious. Racism has no place in our politics.
Correct. Can’t keep racing small businesses.
Beware those conflating business investment (creating jobs and boosting growth) with personal investment (growing individual wealth with minimal wider benefits). Most business investment is done through company structures so this personal tax isn’t relevant at all. Hobbyists already have the Stocks and Shares ISA so again CGT isn’t relevant. There’s minimal risk associated with personal property gains so an “entrepreneurs” discount isn’t justified. Landlords shouldn’t be deterred by taxes on property gains because their main business is rental income. Their concerns can be met by reinstating tax relief on mortgage interest which is a legitimate business expense. The interesting area… Read more »
I agree with bits of what you say but I think your worldview is upside down. You write as if the problem is how we stop people doing too well and its the precise opposite. We need wealth creation not this fixation on making sure nobody gets wealthy. The missing part of all of your analysis is the motivation for anyone starting and running a business. I run an SME and have done for 20 years. Would I advise anyone to do the same now? Well, I’d give them a very cautious “yes but….”. Can I tell you that the… Read more »
You didn’t read my post. Nowhere have I tried to punish wealth creation. We should be balancing risk and reward. You ignore the main reason folks run businesses. It’s not to become wealthy but because they want to be their own boss. You talk as though you might as well just get a 9-5 desk job with a manager you hate telling you what to do. But you know full well you couldn’t stick it. You’ve chosen to control your destiny and that’s good because we need workers and employers in a diverse economy. But your income from your company… Read more »
An extended period of silence from that has-been would be nice.
Disgusting that this war criminal is not in jail
Where were those WMDs again, Tony? Did you ever find any? 🤥
Blair is totally correct. Our national problem is an absence of wealth creation but Labour is fixated on holding back wealth creation for fear of some people doing too well. They seem to think that everyone being poorer is somehow progress? For how much longer are we going to stand for lower living standards justified by the “warm glow of envy” that our millionaire neighbours are being dragged down with us? By 2029, we will be crying out for change and for a return to prosperity. Odds of 4-1 about Kemi Badenoch winning in 2029 are way, way too large.… Read more »
Since Thatcher we’ve lost sight of what wealth creation actually is. She shuttered manufacturing as though it wasn’t needed and replaced it with services. But most of those services aren’t creating wealth, as could be measured by gold bars in UK plc’s bank vault. They’re simply skimming off the top of other people’s wealth and moving it around the economy. Very few businesses and entrepreneurs are creating genuinely new wealth anymore. Personal wealth sure but always at the expense of someone else in the same economy so there’s no net gain in national wealth. Exceptions are the few exports we… Read more »
Earn ur money and pay ur tax, dim problem. Stop moaning or go abroad and hand ur passport in. Another effective way of reforming tax would be to look at the personal allowance taper that results in a marginal rate of 60% for those earning between £100K and £125K, a true disincentive for many more people who work hard and increase productivity.
Tax rates need to fall as you say. If there isn’t any point in working harder, we won’t get growth which is precisely what’s happening. This idea that we can tax our way to prosperity is insane.