Neil Kinnock has urged Andy Burnham to increase tax on assets as a new poll reveals two-thirds of voters back the introduction of a “wealth tax”.
The former Labour leader told The i Paper that there should be a “better balance” between the taxation of earnings and wealth.
He specifically urged the Prime Minister to align tax rates on profits from the sale of assets with those of income tax.
Burnham, is close to Lord Kinnock, who was Labour leader for over nine years from the autumn of 1983, and continues to receive advice from him.
Meanwhile, a new poll for The i Paper by BMG Research found that 66 per cent of adult Britons back the idea of a wealth tax on assets worth more than £10m.
Welshman Kinnock was sitting in the audience when Burnham was confirmed as Labour leader last month, with Burnham paying tribute to the peer in his acceptance speech as a “legend” who had inspired him to join the party in 1985.
“It has always been something that I treasure to get a message from him, with his advice and the care and the thought he puts into those messages,” Burnham said.
With Burnham and his Chancellor John Healey now mulling what decisions they should take in their first Budget on 28 October, Kinnock told The i Paper that more tax should be levied on assets.
He said: “In this century assets and extremely high incomes and bonuses have zoomed while, for several years, earned incomes flatlined.
“Equity requires a better balance, so does efficiency.”
Kinnock said the Government should equalise Capital Gains Tax (CGT) – which currently stands at 18 per cent for basic-rate income taxpayers and 24 per cent for higher and additional-rate taxpayers – with the income tax rates of 20, 40 and 45 per cent.
He said he was confident the Government would recognise both the fairness of the proposal and the benefits of the additional revenue it could generate.
“I’m sure that the Government understands the utility and the encouragement which the further £12bn revenues that such a fair change in CGT would bring,” Kinnock said.
Equalising CGT with income tax has been proposed by other Labour big beasts, including the Defence Secretary Wes Streeting and Burnham’s second in command First Secretary of State Louise Haigh.
When he was considering running for the Labour leadership in May, Streeting said the policy would be a “wealth tax that works”. During the Makerfield by-election Burnham said he wanted to look “in detail” at the idea.
The survey for The i Paper by BMG Research found strong public support for targeting high wealth in the tax system.
According to BMG’s polling, 66 per cent of adult Britons back the idea of a wealth tax on assets worth more than £10m. Just 10 per cent of people opposed such a plan, with support coming from across the political spectrum.
The Prime Minister has tried to remain coy when it comes to specific tax pledges, but he refused to rule out introducing a tax on the wealthy when asked about the policy before entering No 10.
When interviewed by the broadcaster and former footballer Gary Lineker before becoming Prime Minister, Burnham was asked directly about taxing the wealthiest. His response was deliberately non-committal, telling the ex-England star: “I’m not going to rule things out right now.”
He added that he believed “we need a greater sense of fairness”, but that he did not want to “create new divisions” or be seen as “demonising one group”.
Last month, Lineker was among 120 so-called “Patriotic Millionaires”, who signed a letter stating that they supported paying more tax in the form of a 2 per cent levy on wealth over £10m.
Wealth tax ‘could raise £10bn a year’
According to economists and academics at the Paris School of Economics and King’s College London, such a tax could raise £10bn a year for the Exchequer and affect only the 1,000 most affluent households.
People who voted Labour and the Liberal Democrats in 2024 were most supportive of the introduction of such a tax, the poll found – with 79 per cent and 83 per cent in favour, respectively. Some 75 per cent of Green Party voters backed the tax.
But the policy was also supported by Conservative and Reform voters, with 61 per cent and 63 per cent respectively saying they would welcome the measure.
On Kinnock’s idea for equalising CGT on the sale of assets with income tax, support splits along more conventional political lines.
When presented with such an option, just 38 per cent of Conservative voters and 47 per cent of Reform voters were in favour, as opposed to 63 per cent and 65 per cent of Labour and Lib Dem voters, respectively.
In total, 43 per cent of respondents supported the idea with 18 per cent opposed.
Opponents of higher capital gains tax rates argue that it could discourage investment, entrepreneurship and business growth by reducing the returns from taking financial risks.
More broadly, critics of wealth taxes warn that it can lead to wealthy individuals leaving the UK or moving their assets overseas.
When presented with the poll findings on support for the Lineker-backed wealth tax, the Treasury said that it was already possible for people to voluntarily donate money to the Government.
A Treasury spokesperson said: “The Chancellor is fully focused on his priorities, which will boost business, help with the cost of living and support people in every postcode.
“As has always been the case, decisions on tax are a matter for the Chancellor to set out at fiscal events, rather than routinely commenting on proposals made.
“More broadly, anyone who wishes to donate to the government can online.”
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