Blair institute against capital gains tax rise

By the Editorial Team · Monday, July 6, 2026

The Tony Blair Institute has warned that raising the UK capital gains tax to match income tax rates could stifle innovation and economic growth by discouraging entrepreneurs. Their analysis suggests that while higher taxes might increase government revenue in the short term, they risk damaging the country’s ability to attract investment and talent in a competitive global market.

Sir Tony Blair’s think tank has cautioned against proposals to increase the capital gains tax rate in the United Kingdom, arguing that doing so could hinder economic growth and innovation. The warning came in response to calls for equalizing capital gains tax with income tax, a measure that could generate significant additional revenue for the government.

Andy Burnham, the Member of Parliament for Makerfield, has faced pressure to raise capital gains tax to bring it in line with income tax rates. Advocates of the increase suggest it could potentially raise up to £12 billion annually, according to estimates from the Centre for the Analysis of Taxation. Currently, taxpayers enjoy an annual exempt amount of £3,000, with profits above this threshold taxed at rates ranging from 18 percent to 24 percent, depending on the taxpayer’s income bracket.

Guy Ward-Jackson, a senior analyst at the Tony Blair Institute for Global Change, argued in an opinion piece that increasing capital gains tax would be “terrible policy” and would send “entirely the wrong signal” to entrepreneurs. He emphasized the importance of attracting and retaining entrepreneurial talent, warning that higher taxes on investment profits could discourage innovation and economic growth.

Ward-Jackson highlighted the global competition for entrepreneurial skills, noting that while many countries are adopting policies to attract investment and innovators, raising capital gains tax could put the UK at a disadvantage. His comments suggest that the potential short-term revenue gains may be outweighed by longer-term economic consequences.

Supporters of reform contend that aligning capital gains tax rates with income tax would enhance tax fairness and generate substantial public revenue, addressing funding needs in various sectors. Opponents, including the Tony Blair Institute, maintain that such measures could undermine the incentives that drive business development and job creation.

As the debate continues, policymakers face the challenge of balancing revenue generation with maintaining a competitive environment for investors and entrepreneurs amid a complex global economic landscape.

This article was reported by synthesizing coverage from multiple independent news outlets to present a balanced, unbiased account. Read about our editorial standards. Spotted an error? Let us know.