Story perspectives

Labour reviews capital gains tax plan to fund allowances

By Drooid · Sep 21, 2026, 10:02 AM UTC · How we work

Center

Donor Calls Tax Backwards

The UK Labour government is reviewing a proposal to fund allowance rise by raising capital gains tax and ending interest on Bank of England reserves.
Labour donor Dale Vince submitted the plan, saying the current tax system is ‘backwards’ and should be restructured to shift money to lower-income earners.
Prime Minister Andy Burnham and Chancellor John Healey are personally reviewing the tax proposals.

Left

Benefit Cuts Funding

The UK Labour government is reviewing a proposal to fund allowance increase by raising capital gains tax and ending interest on Bank of England reserves.
Labour officials say the review is needed to finance Prime Minister Andy Burnham’s cost-of-living pledges and protect vulnerable households from rising inflation.
Restricting Personal Independence Payment would cut benefits for 1.32 million, saving £8.2 bn, sparking criticism.

Blindspot

Proposals to restrict Personal Independence Payment eligibility would cut benefits for about 1.32 million claimants, saving up to £8.2 bn, and have drawn criticism for harming disabled people.
Within this story's sources, this angle appears mainly in Left-leaning coverage and receives less attention in Center-leaning coverage.

History

Historical Context

In 1997 Gordon Brown’s Labour budget signalled a fiscal shift, introducing a new capital gains rate that raised about £2.5 billion in its first year. Subsequent reforms—1998 taper relief, 2008 Entrepreneurs’ Relief and 2016 basic-rate cut—showed the tax’s evolution. Today Andy Burnham and Chancellor John Healey are again proposing higher CGT to fund allowance increases.

1 of 4

Donor Calls Tax Backwards

The UK Labour government is reviewing a proposal to fund allowance rise by raising capital gains tax and ending interest on Bank of England reserves.
Labour donor Dale Vince submitted the plan, saying the current tax system is ‘backwards’ and should be restructured to shift money to lower-income earners.
Prime Minister Andy Burnham and Chancellor John Healey are personally reviewing the tax proposals.

1 / 4