Former Islwyn MP and Labour leader Lord Kinnock has urged Andy Burnham to introduce a capital gains tax raid in his first Budget.

The ex-Labour leader argued that tax rates on profits from selling assets should match those applied to earnings.

Lord Kinnock’s remarks come after the Prime Minister, who appointed Kinnock’s son Stephen to the cabinet, announced he would deliver his first Budget on October 28.

Capital gains tax (CGT) currently stands at 18% for basic-rate taxpayers, rising to 24% for those in higher and additional-rate brackets. Income tax rates, by contrast, are set at 20%, 40% and 45%.

Speaking to the I Paper, Lord Kinnock stated that he was confident the Government recognised the value and motivation that an extra £12 billion in revenues from such a fair CGT adjustment would provide.

Mr Healey, the incoming Chancellor, is broadly anticipated to increase taxes this autumn, with Mr Burnham having previously suggested Labour would likely need to ask taxpayers for a little more.

Jeremy Hunt, the previous Conservative chancellor, noted that Treasury officials had informed him 24% represented the revenue-maximising rate for capital gains tax.

Hunt explained this was because when tax rates shift, individuals alter their behaviour and postpone asset sales. Pushing tax increases too far would cause revenues to decline.

Hunt’s stance was also endorsed by the right-wing website Conservative Post.

Conservative Post observed that even using Labour’s own favourable arithmetic calculations, Kinnock’s figure appears questionable. Independent analysis from investment platform IG, using HMRC’s own published assumptions, indicates the policy would actually cost the Treasury approximately £7.8 billion yearly rather than generate any additional revenue. In essence, the flagship fairness proposal being championed for Burnham by his former mentor could leave public finances in a worse position, not a better one.

Mr Burnham, the Makerfield MP, is widely regarded as a protégé of Lord Kinnock and considers the peer one of his political heroes.