Sir Tony Blair’s policy institute has delivered an unusually direct intervention in the debate over Britain’s tax strategy, warning Andy Burnham that raising Capital Gains Tax (CGT) could undermine investment at precisely the moment the UK economy needs it most.

The warning comes as Burnham, widely expected to become Prime Minister in the coming weeks following Sir Keir Starmer’s resignation, is reportedly considering aligning CGT with income tax rates as part of a broader effort to strengthen the public finances.

Such a move would represent one of the most significant changes to the taxation of investment income in decades and could raise an estimated £12 billion annually, according to the Centre for the Analysis of Taxation.

But the Tony Blair Institute for Global Change argues the economic consequences could outweigh the fiscal gains.