Jim O’Neill: Capital gains tax hike ‘looms’ as top option for Burnham

Lord Jim O’Neill has cautioned that a potential hike in capital gains tax is on the horizon as a possible revenue-raising measure for Andy Burnham and Chancellor John Healey, who are crafting their October Budget plans. O’Neill made this assertion during an interview with LBC’s Andrew Marr, stating that capital gains tax could be a viable option if the two ruling parties need to balance the books, as it aligns with most Labour think tanks' views on equalizing it with income tax.

However, the former Treasury chief warned that such a move would discourage genuine risk-takers and be counterproductive to economic growth. Additionally, O’Neill dismissed Burnham's recent speech in the House of Commons, suggesting that it showcased a desire for increased government spending, which investors are not keen on. The interview also highlighted the rise in government bond yields, with the 10-year gilt yield reaching 5.25 per cent and 30-year yields hitting 5.89 per cent, the highest since May 1998, reflecting investor unease over government borrowing and rising inflation expectations.

O’Neill criticized Burnham's approach, arguing that it contradicts the reality of global governments' spending challenges and the necessity for responsible debt reduction and fiscal control.