𝓤𝓷𝓲𝓽𝓮𝓭 𝓝𝓮𝔀𝓼

Andy Burnham is plotting another tax raid on British families as demands grow for him to hike the income tax personal allowance.

It comes after eco-tycoon Dale Vince called on the Prime Minister to slap up capital gains tax (CGT), despite critics warning it might deter investors.

The former Labour Party donor, who made his fortune in green energy, is said to have demanded that Mr Burnham increase CGT to the same rate as income tax.

He wants the resulting windfall used to fund a hike in the personal allowance from £12,570 to £15,570, which would mean the rate at which British workers start paying tax would go up by thousands.

The personal allowance has been frozen at £12,570 since 2021. Had it risen with inflation, it would now have reached around £16,070.

Mr Vince said it would “give millions a meaningful boost, with the biggest benefit going to those on the lowest incomes”.

Yet hikes to CGT have sparked fury from Mr Burnham’s political rivals. Kemi Badenoch, the Tory leader, said she did not support an increase as it would be bad for the economy.

She told reporters: “No, I would not support an increase in capital gains.

“Andy Burnham announced a tourist tax just two weeks ago. He’s driving tourists away, now he wants to drive investors away. Capital gains tax is a tax that encourages people to invest so that they know that if they make a profit, they can keep it.

“But if we’re telling people that once you make a profit we’re going to be taking most of it away, they probably won’t invest here in the first place. That’s bad for jobs, it’s bad for growth, it’s bad for business, it’s bad for families. It’s bad for anyone who has aspirations.

“So, no, I don’t support his capital gains tax idea, he needs to cut spending. Andy Burnham needs to tell us what he would cut. There’s a lot of wasteful spending, especially on welfare. He’s too scared to do that, the answer is not more taxes.”

Former Tory minister Sir David Gauke also suggested it might not work, telling the BBC: “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.”

In last November’s Budget, then-chancellor Rachel Reeves announced the freeze on the personal allowance, as well as income tax thresholds, was due to continue until 2031.

The extended freeze is expected to bring in an extra £66.6billion between 2022 and 2031, according to the Office for Budget Responsibility.

Shortly after becoming Prime Minister, Andy Burnham suggested he would “look at” the personal allowance, but made no firm commitment to increasing it.

The Daily Telegraph reported that the modelling commission led by Mr Vince, which proposed increasing capital gains tax, was formally submitted last week. It is understood that the dossier has been sent to both the Treasury and No 10’s “policy unit”, where it will be considered in detail.

On Monday, Mr Burnham’s spokesman said: “Decisions on tax are a matter for the Chancellor to set out at fiscal events.”