Healey warned against tax rises that could harm recovery

Summarised from 2 outlets · Updated 14 Oct, 16:08 · Archive

Lord Jim O'Neill has warned Chancellor John Healey against major tax rises in the October 28 Budget, saying businesses feel beaten up.

Lord Jim O'Neill, a former Tory minister and economic adviser to Andy Burnham, has warned Chancellor John Healey against substantial tax rises in the Budget on October 28. O'Neill told the Treasury Committee that the UK economy is showing signs of recovery, with growth running at two per cent in 2026, levels not seen since before the 2008 financial crisis.

Speaking to MPs, O'Neill said it was important that the Budget did not undermine these green shoots of recovery. He argued that any tax increase needed careful consideration, particularly capital gains tax (CGT) rises. Mr Healey is expected to unveil tax rises and spending cuts to raise money without increasing borrowing during a period of bond market volatility.

O'Neill expressed particular concern about capital gains tax, which some Labour backbenchers have favoured equalising with income tax, which would nearly double the top rate from 24 per cent to 45 per cent. The Chancellor is understood to have rejected such calls. O'Neill said businesses felt 'beaten up' and warned against further tax raids on companies, though he suggested he would be less opposed to taxes on banks than to higher capital gains taxes.

O'Neill also noted that productivity growth appeared to have improved more than forecasters expected, with the Office for National Statistics finding productivity growth nearly double what it previously estimated for the years between 2009 and 2019.

How it is being reported

• Business feels ‘beaten up’, Burnham ally saysLord Jim O’Neill, one of Andy Burnham’s closest allies, has warned that businesses feel “beaten up” as he warned the Prime Minister against another raid on British companies. Speaking to MPs on the Treasury Select Committee, O’Neill doubled down on his opposition to capital gains tax hikes, which he argued could dampen business confidence and [...]City AM · 14 Oct, 15:59
• Healey must not 'screw up' UK's economic recovery with major Budget tax raid says former Burnham adviserLord Jim O'Neil, a former Tory minister and ex-economic advisor to Andy Burnham, told MPs it was important that the October 28 fiscal showpiece did not stamp on green shoots of recovery.Daily Mail · 14 Oct, 15:13

In this story: John Healey · Lord Jim O'Neill · Andy Burnham · UK

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