Economists warn Burnham's capital gains tax raid to 45% would backfire and tip Britain into recession

From the Newshound archive · first published 21 September 2026 · last updated 22 September 2026.

Prime Minister Andy Burnham is actively considering raising capital gains tax to as much as 45 per cent in a £14 billion move, with the revenue earmarked to fund a £600 income tax boost for low earners. The proposal, formally submitted to the Treasury and Downing Street by Labour donor and green energy tycoon Dale Vince, would lift the personal allowance from £12,570 to £15,570 ahead of the October 28 Budget. Economists have warned the move would backfire, with senior commentators arguing Labour is planning to tax "everything that moves" to cover soaring welfare and debt costs.

Chancellor John Healey, who quit the cabinet over defence spending just three months ago, will deliver his maiden Budget on October 28 amid warnings Britain is heading for recession.

Dale Vince, who has donated £6 million to Labour since 2013, argues wealth is "taxed more lightly than work" — his plan would also scrap the interest that the Bank of England pays on its reserves.

Burnham reportedly may call an early election to secure a mandate before launching the tax raid, with Philip Kiszely calling it "a travesty of democracy."