A group of "patriotic millionaires" have urged Chancellor Rachel Reeves to hike capital gains tax to help raise cash for the Government.

Mark Campbell, founder of Higgidy Pies, said that “real investors” would not respond negatively to such a move.

He said: “The UK needs a fairer tax system to invest in its future, and those of us who’ve benefited the most should contribute more so that we have a healthy society and economy for future entrepreneurs to operate within.”

Mr Campbell was speaking on behalf of Patriotic Millionaires UK, a campaign calling for the wealthiest to contribute more in taxes.

The group's demands go against the Treasury's analysis that hiking capital gains by 10 percent could end up costing the taxpayer £2billion.

The Treasury warned that such a move could drive wealthy people out of the UK or deter people from selling their assets.

Patriotic Millionaires UK made the demand as part of a report by the Institute for Public Policy Research (IPPR).

According to the think tank, capital gains should be aligned with income tax.

Pranesh Narayanan, research fellow at IPPR and author of the paper, said: “The recent fear-mongering from some that increasing capital gains tax will take the economy back to the stone ages is pure hyperbole.

“It was famously pro-growth Conservative chancellor Nigel Lawson who equalised capital gains tax with income tax rates in the first place.”

Julia Davies, an investor, told The Telegraph: “If you were speaking to the kind of people that I’m investing in now who are setting up businesses, you find that they’re not alarmed.

“The last thing they’re thinking about is what’s going to happen if it takes off, they sell it later on and make some money. What they’re thinking about at that stage is: how do we get the business going?”

Capital gains tax raised £14.8billion in the year to March.