Conservatives urge Burnham to rule out tax rises at Budget

The Conservatives are urging Prime Minister Andy Burnham and Chancellor John Healey to rule out tax rises at next month’s Budget, with shadow chancellor Andrew Griffith warning that rumours of higher taxes are causing Britain’s wealth creators to flee the country.

A first major speech

Griffith made his remarks in his first major speech since being appointed shadow chancellor by Conservative leader Kemi Badenoch. Addressing an audience at a further education college, he said businesses were “suffering enough” and called on Healey to end the uncertainty by ruling out any new taxes on small businesses and the self-employed.

“Any government worth its salt would do everything it could to help them,” Griffith said, adding that while not every business would succeed, the economy needed green shoots that were nurtured rather than trampled upon. He described business owners and the self-employed as “economic heroes”, a phrase clearly designed to frame the Conservatives as the party of enterprise and the government as hostile to it.

The speech touched on several long-running complaints from the freelance and contracting sector. Griffith said the IR35 rules, which are designed to stop people posing as self-employed contractors to avoid tax when they in practice work like employees, had “crushed the dreams of self-employed people”. He promised that a Conservative government would replace the system with something that respected the right of the self-employed to choose their status and only tackled genuine abuse.

He also urged the chancellor to pause the rollout of Making Tax Digital, the new system that requires the self-employed to register income with HMRC through digital platforms. Griffith acknowledged that the previous Conservative government had set up the system, but said the execution “left a lot to be desired” and described the experience for many people as a “special torture”.

Budget date and wider pressures

Chancellor John Healey is due to set out his Budget on 28 October against a backdrop of rising inflation and global energy prices. The war in the Middle East has added further uncertainty, and Burnham has warned that the Budget would be “challenging” but said he was prepared to take “difficult decisions” on the economy.

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Trade unions are also circling the Budget. On Thursday, union leaders are set to meet the chancellor to push their own proposals, with the Unite union urging the government to reverse the freezing of tax thresholds. The combination of union demands on the left and Conservative pressure on the right means the government is being pulled in opposite directions before the autumn statement.

Labour’s response

Labour said Griffith had made the Conservatives’ priorities clear: scrapping hard-won workers’ rights while promising tax cuts with no explanation of how they would be paid for or which public services would be cut. A Labour spokesperson said the Tories should be apologising for crashing the economy under Liz Truss, Griffith’s old boss, rather than asking working people to pay the price all over again.

The exchange is a familiar one in British politics, but it lands differently when inflation is still uncomfortably high and household budgets remain under strain. The government’s ability to promise tax stability will depend heavily on what the public finances look like when the chancellor sits down to write the Budget.

Why it matters

Tax rhetoric matters most when businesses and individuals are making decisions about whether to invest, hire, or move money overseas. Griffith’s claim that wealth creators are already fleeing is a serious accusation, and whether or not it is true, it reflects a genuine worry among some business groups that the tax environment is becoming less predictable.

For the government, the risk is that being seen to contemplate tax rises before the Budget hardens opposition and undermines confidence. For the Conservatives, the challenge is to convince voters that their alternative would be both fair and fiscally credible, especially after the political damage caused by the Truss episode.

What happens next

The chancellor’s Budget on 28 October will be the moment when any tax decisions are confirmed. Until then, both sides will continue to set out their positions in speeches and interviews, and the government will try to manage expectations about what is and is not possible.

The Conservatives are expected to develop their tax policies further in the run-up to their party conference in October, and reports have suggested they could make a promise on inheritance tax. Griffith told the BBC he would “love” to cut the tax but said any promise would have to be subject to a proper funding plan.