Alistair Darling was on Tuesday night accused of hammering entrepreneurs after it emerged that sweeping tax changes he announced to crack down on high-earning private equity executives would hit thousands of small companies, employees and shareholders.

The chancellor argued that by introducing a flat 18 per cent rate of capital gains tax for all investors, he would “make the system more straightforward and sustainable”. He added it would ensure “those working in private equity pay a fairer share”.