Labour clamour mounts for wealth taxes at Budget despite alarm that they could backfire by choking off Treasury revenues… with rich already fleeing the country

See more Daily Mail on Google - save us as a Preferred Source Published: 05:35 EDT, 21 September 2026 | Updated: 05:36 EDT, 21 September 2026 The Labour clamour for 'wealth taxes' at the Budget is mounting today despite warnings they would backfire.Millionaire eco-tycoon and party donor Dale Vince has proposed hiking Capital Gains Tax (CGT).Together with ending interest payments on commercial bank deposits with the Bank of England, Mr Vince said that could fund an increase in the personal allowance for millions of Brits.But Chancellor John Healey has been cautioned that another raid on wealth-creators would be a disaster and only strangle revenues, with fears rich people are already relocating. Andy Burnham and Mr Healey are desperately looking for ways of balancing the books and paying for big spending promises.The Middle East crisis is believed to have wiped out much of the Chancellor's 'headroom' for meeting his fiscal targets. Andy Burnham and John Healey (pictured) are desperately looking for ways of balancing the books and funding big-spending promises Millionaire eco-tycoon and party donor Dale Vince has proposed hiking capital gains tax (CGT)But Mr Burnham has been talking up his commitment to helping Brits with the cost-of-living, as energy price hikes drive inflation and the BoE prepares to push up interest rates for mortgage-payers. Unions spent much of their annual TUC conference last week urging ministers to bring in more cash from banks and the wealthy. In a submission for the Budget on October 28, Mr Vince said that equalising the rates of CGT with income tax - up to 45 per cent - would generate £14billion.Alongside ending interest payments to commercial banks, he suggested that could bring in enough to increase the personal allowance by around £3,000 to £15,570 a year.That is just below what it would have been had it not been frozen in 2021.Mr Vince said the existing system was 'backwards' and called on ministers to 'put money into the pockets of the people who will spend it' to jumpstart the economy.He told BBC Radio 4's Today programme: 'It will cost £20billion actually to restore the income tax freeze, which is really robbing people, particularly hard-working people.'We pay interest to the banks every year totalling about £30billion, you know the banks that don't really pay us any money for our deposits with them, we through the Bank of England pay them 4 per cent at the moment for the money that they're sat on… £30billion, take that back, pay for the income tax allowance, and have £10billion in change.'However, the Treasury's own estimates indicate that a 10 percentage point rise in CGT would actually lower revenues by £3.5billion by 2028-29. Tory chairman Kevin Hollinrake warned a CGT hike could be 'the dumbest economic policy of all time'. 'The clue is in the name - Capital Gains Tax - means gains on capital that you've invested and put at risk,' he said. 'Tax it as if there's no risk involved and fewer people will invest. Bad for jobs, bad for the economy.' Mr Hollinrake insisted it would also be 'bad for tax receipts'.'You only pay CGT when you sell stuff, so people who've invested and own stuff already will defer selling stuff until a future govt sees sense and lowers CGT,' he added. 'Utterly stupid sixth-form economics.' Former Conservative Treasury minister David Gauke also cast doubt on whether the policy would work. Mr Burnham has been talking up his commitment to helping Brits with the cost-of-livingSir David told BBC Radio 4: 'Anything that sounds too good to be true is almost certainly too good to be true. 'I'm very sceptical that you can raise that sort of money from the banking sector, without it having a significant impact on competitiveness, a significant impact on lending to small businesses in particular.'He added: 'There isn't, I'm afraid, an easy answer whether that's the banking sector or a few high net worth individuals, our tax system is already very dependent upon the very wealthy. I'm afraid that answers that sort of sound terrific and mean ordinary people are unaffected are not going to be credible.'