New flat rate 'is a threat to growth'

AS well as making the capital gains tax system more simple, the Chancellor also said he would make it more "sustainable''. And this is the rub. Sustainable meant raising another pounds 2bn over the next three years from entrepreneurs, employee shareholders and investors.

The Treasury hopes that, by 2011, pounds 980m more tax will be raised under the new flat rate capital gains regime.

Doug Richard, chairman of research firm Library House, a significant investor in small, fast-growing British companies and a former Dragons' Den panellist, sums up the mood among those hit: "Nothing this Government has done is as damaging to the entrepreneurial economy as this proposal. This tax will drive down the most important means by which our economy grows.''

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