Miliband tipped for Chancellor under Burnham (Image: Getty)
Britain’s super-rich are planning to feel the country should Ed Miliband be made Chancellor under incoming Prime Minister Andy Burnham. Fears have mounted after the Makerfield MP was said to be plotting a multi-billion tax raid targeting the country’s wealth creators.
Now the country’s top businessmen have reportedly engaged international tax advisors so they can work out new ways to skirt a possible expansion of Capital Gains Tax (CGT). Mr Burnham is widely expected to launch a review of CGT before his first budget this year.
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The former Mayor of Greater Manchester has previously said the country has “overtaxed jobs [and] undertaxed wealth” in what was interpreted as a call to hike levies on gains outside of employment. Mr Burnham has pledged to stick to Labour’s manifesto commitment – made more than 52 times – not to increase income tax, VAT or National Insurance. It means he could consider levelling the rates of income tax and CGT, and even a new top rate of income tax itself.
Critics have long pointed out that Rachel Reeves, Sir Keir Starmer‘s Chancellor, would go on to raise national insurance on employers, as well as slap VAT on school fees and drag many pensioners into income tax. They accused Ms Reeves of breaking the manifesto pledge at the time.
Mr Miliband, who currently serves as the Net Zero Secretary, is a close ally of Mr Burnham having seconded one of his staff sent to assist the Makerfield campaign. The Net Zero chief is now considered to be one of the frontrunners for the Treasury position.
That’s despite City bosses having warned that such an appointment is likely to not be seen favourably by the markets, and pushing for a choice such as Shabana Mahmood or Wes Streeting. The Daily Telegraph reports that entrepreneurs are now planning “escape plans” should Mr Miliband take the role.
Burnham plotting multi-billion wealth tax raid (Image: Getty)
David Lesperance, an international tax advisor to the super-rich, told that 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.”
“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.”
Mr Burnham has said he has not made his decision about who to make Chancellor. The equalisation of CGT with income tax has already been rejected by the Treasury before amid concern that it would end up raising less money than the current regime.
The prospect of Ed Miliband becoming Chancellor under an Andy Burnham-led government has intensified a long-running debate over taxation, wealth creation, and the future direction of the British economy. While supporters of a tougher approach toward wealth taxation argue that those with the greatest financial resources should make a larger contribution to public finances, critics warn that significant tax increases on investment and capital could discourage entrepreneurship, reduce business confidence, and encourage wealthy individuals to relocate abroad.
At the centre of the discussion is Capital Gains Tax (CGT), which applies to profits made from selling assets such as shares, businesses, and property that have increased in value. Reforming CGT has repeatedly been considered by governments of different political backgrounds because of the potential revenue it could generate. However, policymakers have also faced a difficult balancing act: increasing tax receipts without creating incentives for investors, entrepreneurs, and high-net-worth individuals to move their assets or residency elsewhere.
Supporters of CGT reform argue that the current system creates an imbalance between income earned through employment and wealth accumulated through investments. They claim that individuals who earn large amounts from asset growth can sometimes face lower effective tax rates than people whose income comes primarily from wages. From this perspective, aligning CGT rates more closely with income tax would create a fairer system and ensure that wealth contributes more significantly to funding public services.
Opponents of such reforms argue that the issue is more complicated. They point out that investment decisions are often made over many years and that capital gains are not the same as regular income. Entrepreneurs, for example, may spend decades building companies before eventually selling them, and higher taxes on successful exits could reduce incentives for people to create businesses in the first place. They also argue that wealthy taxpayers contribute in many ways through existing taxes, employment creation, and investment.
The possibility of an “exit tax” or additional measures affecting people who move their wealth abroad has further increased concern among some business groups. Countries around the world have introduced different approaches to preventing tax avoidance, but designing such policies can be challenging. Governments must balance preventing aggressive tax planning with maintaining an environment that remains attractive to international investors.
The potential appointment of Miliband as Chancellor has become particularly controversial because of his existing role in climate and energy policy. As Secretary of State for Energy Security and Net Zero, he has been closely associated with Labour’s plans for renewable energy expansion, green investment, and reducing carbon emissions. Supporters argue that his economic vision could accelerate investment in new industries and create long-term growth opportunities. Critics, however, question whether ambitious environmental policies could increase costs for businesses and households in the short term.
Financial markets are also expected to pay close attention to any leadership transition and the government’s first economic decisions. Previous periods of uncertainty in British politics have demonstrated how quickly investor confidence can change when there are concerns about government spending, taxation, or fiscal credibility. For this reason, a new Chancellor would likely face immediate pressure to reassure businesses, international investors, and financial institutions that economic stability remains a priority.
Andy Burnham’s own economic approach has focused heavily on regional development and reducing inequality between different parts of Britain. As Mayor of Greater Manchester, he has promoted greater local decision-making powers and argued that economic growth should not be concentrated only in London and the South East. A potential Burnham government may therefore seek to combine changes to taxation with broader reforms aimed at strengthening regional economies, improving infrastructure, and increasing investment outside traditional economic centres.
However, implementing such an agenda would involve significant political challenges. Labour would need to demonstrate that any tax increases are not simply a way to raise additional revenue but part of a wider strategy to improve public services and economic productivity. The government would also need to convince businesses that Britain remains a competitive place to invest despite changes to the tax system.
The debate has also highlighted a wider question facing many developed economies: how to address rising inequality while maintaining economic dynamism. Governments across Europe and North America have struggled with similar issues as wealth has become increasingly concentrated among a smaller section of society. Policymakers must decide how much responsibility should fall on high-income individuals and large asset holders while ensuring that economic growth is not weakened.
For the Conservative opposition and other critics of Labour’s economic plans, the possibility of wealth tax increases provides an opportunity to argue that the government risks damaging Britain’s reputation as a business-friendly economy. They are likely to focus on concerns about capital flight, reduced investment, and the potential impact on jobs. Labour, meanwhile, would likely argue that carefully designed reforms are necessary to fund public services and create a more balanced economy.
Ultimately, the decision over who becomes Chancellor and what policies are introduced will be one of the earliest tests of any Burnham administration. The government would need to reassure markets while also meeting expectations from Labour supporters who want greater investment in public services and a reduction in economic inequality. How it manages this tension could define not only the government’s economic reputation but also its long-term political future.
The coming months are therefore likely to become a major test of Britain’s economic direction. Whether the country moves toward a higher-tax model focused on redistribution and public investment, or maintains a more cautious approach designed to attract private capital, will depend on the choices made by the next government and the response from businesses, investors, and voters.