Nearly 70 per cent of Britons think high-earners already pay their fair share in blow to Burnham's tax-the-rich agenda

Former Conservative Treasury minister Lord O’Neill of Gatley has criticized Prime Minister Andy Burnham over potential plans to raise capital gains tax, calling the proposal “stupid” and warning it could harm economic growth. In an interview with The Times, O’Neill argued that increasing taxes on asset sales would deter business activity and reduce government revenue, as wealthy individuals might choose to delay transactions or relocate their investments abroad. His remarks come ahead of the upcoming Budget on October 28, during which Burnham is expected to outline key fiscal decisions. O’Neill, who served in the Treasury under former Prime Ministers David Cameron and Theresa May, emphasized that raising capital gains tax would undermine efforts to stimulate growth. He claimed that current economic challenges, such as lingering effects of Brexit, shifts in national insurance policies, and labor market reforms, already place strain on businesses. Adding new taxes, he suggested, would exacerbate these issues rather than alleviate them. He noted that many business owners might avoid selling assets altogether to escape the tax, leading to lower overall tax collection. The former minister also questioned Burnham’s broader economic strategy, suggesting that the prime minister’s pledge to achieve “growth in every postcode” might require difficult choices. O’Neill urged Burnham to prioritize regions capable of driving economic expansion, particularly London and the West Midlands, while acknowledging that focusing on areas like the Northern Powerhouse, comprising cities such as Manchester, Liverpool, Sheffield, and Leeds, could prove challenging politically. He pointed out that London alone contributes as much to the economy as the combined output of the next eight largest urban centers, making its performance critical to overall GDP growth. Public sentiment appears to align with O’Neill’s concerns. A recent survey by the Adam Smith Institute found that nearly 70 percent of Britons believe high-earners already pay their fair share of taxes, potentially complicating Burnham’s attempts to implement additional levies on the wealthy. The report also indicated that two-thirds of respondents recognized that increasing taxes on the rich could result in higher taxes for ordinary workers if wealthy individuals moved their assets overseas. According to the TaxPayers’ Alliance, the top 1 percent of earners in the UK contribute 28.2 percent of all taxes, despite earning only 13.3 percent of total income. Burnham has not ruled out further tax increases on high-income earners, though he has not committed to specific measures. His government faces mounting pressure to address the growing cost of living crisis, with inflation affecting different segments of society unevenly. Low-income households saw annual inflation rise by 2.7 percent in the year ending June 2026, compared to 2.8 percent for higher earners. This disparity has sparked debate over whether current tax policies adequately reflect the realities of economic hardship faced by various groups. O’Neill, who declined a position as the prime minister’s economic adviser, stated that he would not accept a government role due to his status as a crossbench peer, which requires independence from party whips. Additionally, he expressed reluctance to place his business interests into a blind trust, which would be necessary to avoid conflicts of interest in an official capacity. Despite this, he praised Burnham for fostering a more optimistic political climate and for articulating a clear vision for the nation. As the Budget approaches, the government must balance its commitment to addressing inequality with the need to maintain economic momentum. O’Neill’s warnings highlight the delicate nature of fiscal policymaking, especially amid shifting public perceptions and evolving economic conditions. The outcome of the upcoming Budget will likely shape both immediate financial strategies and long-term economic direction.