Reforms that discourage investment risk undermining the Government’s promises to boost British businesses. They would also go against the Financial Conduct Authority’s plans to get more savers investing amid concerns that many are losing out on stock market returns.
Nikhil Rathi, chief executive of the FCA, said in a speech in March: “For years, too much is held in cash by a customer base that exhibits a high level of inertia.
“That reduces savers’ returns and limits capital for productive investment in our economy.”
Recent analysis from Barclays suggests that UK adults hold £430bn of “possible investments” in cash savings.
The Prime Minister this week rejected speculation the Government could raise capital gains tax as high as 39pc.
“That’s getting to an area which is wide of the mark,” Sir Keir Starmer told Bloomberg when asked about the figure.
However, neither Sir Keir nor the Chancellor have ruled out increasing the rates.
A rate increase looks more likely following reports that Ms Reeves could be looking to raise £40bn in the Budget, mostly through tax rises. The £40bn figure is far more than the £22bn fiscal black hole the Chancellor claims to have inherited from the Conservatives.
About 350,000 investors pay capital gains tax every year when they sell assets such as second homes and investment portfolios.
Capital gains tax revenue is predicted to hit a record high of £23.5bn in 2028-29 due to rising asset prices, according to the Office for Budget Responsibility
A Treasury spokesman said: “We do not comment on speculation around tax changes outside of fiscal events.”