Capital Gains Tax relief is doubled but angry bosses hit out at 'gesture'

Currently, the first 1m of lifetime gains are taxed at a lower rate of 10 per cent rather than the main rate of 18 per cent.

The threshold will now increase to 2m, which Alistair Darling said would enable entrepreneurs to further benefit from their effort and investment.

Simon Walker, chief executive of the British Private Equity and Venture Capital Association, said it would "further encourage entrepreneurship and foster innovation".

However, Yorkshire's business bosses reacted angrily.

Jonathan Straight, head of Leeds-based recycling products and services group Straight, said: "It's nothing other than a gesture.

"Although it looks very nice the government is still robbing the entrepreneurs because nobody I know is going to stop once they've made 2m.

"It will result in far less Capital Gains Tax being collected because savvy people cashing in will make sure their domicile is offshore."

Graham Whittle, managing director of Whitby Seafoods, added: "Frankly I find it pathetic fiddling with a fundamentally flawed approach to wealth creation.

"Entrepreneurs do not want to pay high levels of tax so that government can give it back in parsimonious bureaucratic schemes. Gordon Brown and his team do not get it. They do not know why someone takes the considerable and inevitable risks of being in business."