Britain's super-rich are reportedly planning to flee the country if Ed Miliband is appointed Chancellor under incoming Prime Minister Andy Burnham, amid fears of a multi-billion-pound tax raid targeting wealth creators. The Makerfield MP, currently serving as Net Zero Secretary, is considered a frontrunner for the Treasury position, sparking alarm among top businessmen who have already engaged international tax advisors to explore ways to skirt a potential expansion of Capital Gains Tax (CGT).
Burnham's Tax Pledge and CGT Review
Andy Burnham, the former Mayor of Greater Manchester, is widely expected to launch a review of CGT before his first budget this year. He has previously stated that the country has "overtaxed jobs [and] undertaxed wealth," a remark interpreted as a call to increase levies on gains outside employment. However, Burnham has pledged to stick to Labour's manifesto commitment—made more than 52 times—not to increase income tax, VAT, or National Insurance. This leaves room for him to consider equalising income tax and CGT rates, or even introducing a new top rate of income tax.
Escape Plans and Advisor Insights
The Daily Telegraph reports that entrepreneurs are now crafting "escape plans" should Miliband take the role. David Lesperance, an international tax advisor to the super-rich, told the paper: "My clients are concerned that, with the proclamations from both Andy Burnham and Ed Miliband, there will be a massive increase in CGT and possibly an exit tax as well." He added: "These people were concerned about Labour at the last election, and they have still got their escape plan set up. Now I’m getting more people setting up escape plans."
Criticism of Previous Labour Policy
Critics have long pointed out that Rachel Reeves, Sir Keir Starmer's Chancellor, broke manifesto pledges by raising national insurance on employers, slapping VAT on school fees, and dragging many pensioners into income tax. Burnham has not yet made a final decision on his Chancellor, but City bosses have warned that Miliband's appointment would not be viewed favourably by markets, instead pushing for candidates like Shabana Mahmood or Wes Streeting.
Potential Impact of CGT Equalisation
The equalisation of CGT with income tax has previously been rejected by the Treasury amid concerns that it could raise less revenue than the current regime. Despite this, the prospect of such a policy under a Burnham-Miliband government has already triggered a wave of contingency planning among the wealthy.
As Burnham prepares to take office, the super-rich are watching closely, with many ready to activate their exit strategies if the feared tax raid materialises.
