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.

In his first major speech as shadow chancellor Andrew Griffith said businesses were "suffering enough" and that rumours of higher taxes were "causing Britain's wealth creators to flee the country".

He also promised to replace tax rules for self-employed workers, who he said had been "badly let down" by the system.

Labour said: "Andrew Griffith has made the Conservatives' priorities clear: scrapping hard-won workers' rights, while promising tax cuts with no explanation of how they would pay for them or which public services would be cut."

The Labour spokesperson added: "The Tories should be apologising for crashing the economy thanks to Griffith's old boss Liz Truss – not asking working people to pay the price all over again."

The chancellor is due to set out his Budget on 28 October against a backdrop of rising inflation and global energy prices.

On Thursday, trade unions will meet the chancellor to push for their proposals, with the Unite union urging the government to reverse the freezing of tax thresholds.

Burnham has warned that the Budget would be "challenging" due to the war in the Middle East but insisted he was prepared to take "difficult decisions" on the economy.

Griffith - who was appointed as shadow chancellor last month - told an audience at a further education college that taxes in the UK had reached "nosebleed territory" and that Healey "must end uncertainty today and rule out any new taxes".

"He must rule out increasing taxes on small businesses and the self-employed."

Griffith described business owners and the self-employed as "economic heroes", adding: "Any government worth its salt would do everything it could to help them because whilst not every acorn grows into a mighty oak we need green shoots that are nurtured not trampled upon."

He said the IR35 regime had "crushed the dreams of self-employed people" and promised that a Conservative government would "replace it with a new system that respects the right of the self-employed to choose their status and only prevents actual abuse".

The IR35 rules are designed to prevent people avoiding tax by posing as self-employed contractors rather than employees but some freelancers argue the system has led to unfair treatment.

Griffith also urged the chancellor to pause the rollout of Making Tax Digital, the new system for the self-employed to register their income with HMRC.

"For the self-employed, many of whom will have started out in colleges such as this, there is this special torture of Making Tax Digital."

He acknowledged that the previous Conservative government had been responsible for setting up the system and said that "despite well-intentioned, the execution has left a lot to be desired".

Griffith told the audience that he had commissionedLord Mackinlay of Richborough, the former South Thanet MP, and Robert Colvile, the outgoing director of the Centre for Policy Studies think tank, to produce a report on reducing regulations for small businesses.

Over the weekend, the Mail on Sunday reported that the Conservatives could promise to abolish inheritance tax if they win the next election, with the policy potentially being announced at the party's annual conference in October.

Speaking to the BBC ahead of his speech, Griffith said he would "love" to cut the tax but it would have to be "subject to an ability to set out properly how we would fund that".

"I'm going to be responsible and only want to make promises I can keep," he said.

He added that he had recently been on a fact-finding trip to Sweden, which scrapped inheritance taxes in 2005.

Reform UK has previously said it wanted to cut inheritance tax, but speaking at the party's conference, the party'sTreasury spokesman Robert Jenrick said it would not be a priority.

"It's a bold chancellor that would say I'd rather privilege 36,000 families than 40 million [income] taxpayers," he told a Reform conference fringe event.

Asked if getting rid of inheritance tax would amount to a tax cut for the wealthy, Griffith argued that it would boost growth and that the wealthiest people were often able to "arrange their affairs" to avoid the tax.

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