Jim Sutcliffe, chief executive of Old Mutual, urged the Government to abandon its capital gains tax reforms after bond sales at the London-listed insurer fell off a cliff in the weeks after Alistair Darling’s Pre-Budget Report.

Mr Sutcliffe said that plans by the Chancellor to introduce a flat-rate capital gains charge of 18 per cent “have made our life a little difficult”.

He said the changes, unveiled to a storm of protest last month, effectively wipe out a tax benefit to long-term bondholders, who might otherwise pay a 10 per cent rate.

He said there had been a “significant tail-off” in bond sales in subsequent weeks, although he declined to give details.

Bond sales form part of an Old Mutual business that reported improved sales worth £205 million in the first half. Mr Sutcliffe said: “The Government may yet change the rule. If it happens, the change needs to be gradual, so people can plan in advance.”

His call for a Treasury rethink on the tax change came as ProShare, the not-for-profit lobby group for employee share ownership, laid out its opposition to the measure on behalf of the 1.7 million workers who are part of company share-save schemes.

Old Mutual lost 1p to 164p.

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