Economists warn Burnham's capital gains tax raid to 45% would backfire and drive away investors

From the Newshound archive · first published 21 September 2026.

Prime Minister Andy Burnham is weighing a capital gains tax rise to as high as 45 per cent, a £14 billion measure whose proceeds would fund a £600 increase for low earners through a higher income tax personal allowance. Economists caution the plan would prove self-defeating, with Chancellor John Healey's October 28 Budget already denting Labour's polling recovery. The proposal was put to the Treasury and Downing Street's policy unit by Dale Vince, the renewable energy entrepreneur and Labour benefactor who has contributed £6 million to the party since 2013.

The so-called 'Burnham bounce' has stalled, with political commentators arguing he has already squandered his opportunity for a snap election.

Reform UK led both seat tallies and vote share in council by-elections throughout Burnham's opening 60 days in Downing Street, outpacing Labour 11 seats to nine.

Landsec chief executive Mark Allan has called on Burnham to abolish business rates altogether, warning that nearly one million young people are caught in a 'catastrophe in slow motion'.