Labour urged to fund lower-income tax cut by raising capital gains tax
Labour donor Dale Vince has proposed increasing the personal allowance by boosting capital gains tax and ending interest on Bank of England reserves.
Ecotricity owner and Labour supporter Dale Vince has sent a proposal to the Treasury to fund a higher personal tax allowance by gradually increasing capital gains tax to match income tax levels and by halting interest earnings on Bank of England reserves. The suggested allowance of £15,570 would approach the level that would have existed without the 2021 freeze, offering a notable boost to low-income households. Vince criticised the existing tax structure as favouring banks and wealth over work, urging ministers to put money into the hands of spenders.
The plan is reportedly being examined by Labour’s Andy Burnham, who is campaigning on a cost-of-living agenda, and Chancellor John Healey ahead of the October 28 Budget. The UK Government has not provided a response, and a Treasury spokesperson said tax decisions are set by the Chancellor at fiscal events.
Why it matters
The proposal could reshape UK tax policy, affecting millions of low-income earners and the balance between wealth and labour taxation.
How this story developed
- Sep 1 Prime Minister Andy Burnham to Address Commons on First Day Back
- Sep 3 Burnham announced a plan to extend devolution to all parts of England and to increase public control of utilities.
- Sep 4 Bond yields surged to their fastest rise since the 2022 mini‑budget, wiping out £12 billion of fiscal headroom.
- Sep 6 Burnham pledged to transfer failing utilities into public ownership.
- Sep 6 John Healey will launch a £150 million fund aimed at supporting university spin-outs and other high-growth companies across northern England.
- Sep 7 Healey also pledged steps to curb borrowing costs, energy bills, regulation and labour expenses on UK businesses.
- Sep 9 Prime Minister Andy Burnham said he will not trim social security programmes to meet the 3 % of GDP defence spending goal and gave no timetable for reaching it.
- Sep 9 Burnham publicly rejected the welfare‑cut funding plan.
- Sep 13 Burnham faced his first Prime Minister's Questions where opposition members pressed him on funding for his agenda.
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