Leading industry figures have expressed concern that the government’s proposed tax hikes could hinder economic growth and lead professionals to relocate abroad.

The executives of Lloyd’s of London and CVC Capital Partners joined the discussion surrounding anticipated tax increases after Sir Keir Starmer, the Prime Minister, remarked that “those with the broadest shoulders should bear the heavier burden.”

Sir Keir’s comments have been viewed as an indication that the government may elevate capital gains tax in the upcoming autumn budget, in addition to earlier commitments to tax gains from private equity executives more heavily.

Bruce Carnegie-Brown, chairman of Lloyd’s of London, cautioned that the government risks undermining its strategy to enhance economic growth if it miscalculates tax increases and proposed reforms to workers’ rights. He noted, “Everyone is quite optimistic about the growth agenda that they’ve asserted is a priority. However, if the outcome of their taxation and labor law reforms stifles growth, it will displease businesses. People are eager to see the initial decisions from the government in the budget set for next month.”

Rob Lucas, chief executive of CVC Capital Partners, emphasized that adjustments to the tax structure for private equity earnings could incentivize dealmakers to establish their bases abroad. The Labour Party has indicated intentions to eliminate a system that allows private equity fund executives to pay taxes on profit shares at a capital gains rate of 28 percent, instead of the higher income tax rate of 45 percent.

Lucas commented, “Will it affect where some individuals prefer to be located? Likely. Our team members are highly adaptable and can operate efficiently from any jurisdiction.”

The private equity sector has warned that altering the tax treatment of carried interest, or “carry,” could lead to a significant outflow of financial services professionals from the UK, potentially impacting investment levels. Some experts argue this could be as detrimental to London’s stature as a global financial center as Brexit.