Healey must not 'screw up' UK's economic recovery with major Budget tax raid says former Burnham adviser

Published: 10:10 EDT, 14 October 2026 | Updated: 10:43 EDT, 14 October 2026 Chancellor John Healey has been warned not to 'screw up' UK economic recovery with a major tax raid on businesses in the Budget.Lord Jim O'Neill, a former Tory minister and ex-economic adviser to Andy Burnham, told MPs it was important that the October 28 fiscal showpiece did not stamp on green shoots of recovery.Mr Healey is expected to unveil tax rises and spending cuts as he seeks to raise money without increasing borrowing at a time when the bond market is volatile.But Lord O'Neill warned again against any increase to capital gains tax (CGT), something favoured by some Labour backbenchers. The Chancellor is said to have rejected calls to equalise CGT with income tax, which would almost double the top rate from 24 per cent to 45 per cent.Appearing in front of the Treasury Committee today, Lord O'Neil said there were signs that economic growth was at 2 per cent in 2026 so far.'The most important thing for me ... is this Budget doesn't screw any of it up, because it has been quite a while since we had 2 per cent growth,' he said. Lord Jim O'Neill, a former Tory minister and ex-economic advisor to Andy Burnham, told MPs it was important that the October 28 fiscal showpiece did not stamp on green shoots of recovery The Chancellor is said to have rejected calls to equalise CGHT with income tax, which would almost double the top rate from 24 per cent to 45 per centLater he said there were signs that productivity was also improving, adding: 'Because of some of these slightly cautiously encouraging trends, the last thing the Budget should be doing is to interrupt them. 'Given how business feels so beaten up over however far (back you want to think), any tax increase needs to be really thought through more carefully than before, especially things like CGT.... 'This is highly risky stuff, the simplistic view that it should be taxed at the same level as income tax in my view has simply no understanding of those kinds of things.' CGT 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 per cent and 24 per cent, compared with between 20 per cent and 45 per cent for income tax. Yesterday the International Monetary Fund said UK gross domestic product (GDP) was set to grow 1.3 per cent this year, having previously predicted a 1 per cent rise.However, growth for next year is set to slow to 1.2 per cent, down from a previous forecast of 1.3 per cent.Lord O'Neill's remarks came as a former head of the Civil Service during the Blair and Brown years said Mr Burnham had yet to put forward a coherent vision for the country.Lord Gus O'Donnell, who served as cabinet secretary under the previous Labour administration, suggested ministers needed to demonstrate they were thinking about the 'big picture' for Britain.Speaking at the Institute for Fiscal Studies' (IFS) 'green budget' event, held each year ahead of the Government's Budget, he said the Prime Minister needed to move beyond the 'fix the foundations' mantra which underpinned Sir Keir Starmer's time in power.Lord O'Donnell said 'The number one thing which I think we need to bear in mind is the big picture. What is the vision, right?'We all went on about what's the vision for the Government, what's the vision for where they want to be in terms of public spending? And all those options that were laid out.'I still don't see a vision, right? I'm still searching for a vision.'He listed various ongoing independent reviews into reforming benefits, reducing joblessness among young people, and helping people with health conditions and long-term illness into the workplace.He added: 'If you bring all of those reviews together you can say… and it will come with how you manage the answers to those questions that have been put, you could have a coherent narrative, which I think would make it much easier for the markets to understand where the Government is going.'