The Burnham tax rises row has intensified as the Conservatives call on Prime Minister Andy Burnham and Chancellor John Healey to rule out new taxes at the October Budget.
Shadow chancellor Andrew Griffith made the demand during his first major speech in the role. He argued that businesses and self-employed workers face too much uncertainty.
Griffith said higher-tax speculation was hurting confidence. He urged Healey to rule out new taxes on small businesses and self-employed workers.
The government will present its Budget on October 28. The announcement comes as inflation rises and global energy prices remain under pressure. Burnham has warned that the Budget will require difficult economic decisions.
Griffith Targets Self-Employed Tax Rules
Griffith also attacked the IR35 tax rules.
The rules aim to prevent contractors from avoiding employment taxes by presenting themselves as self-employed. However, some freelancers and contractors have criticised the system.
Griffith said the Conservatives would replace IR35 with a different system if they return to government.
He also called for a pause to the rollout of Making Tax Digital for self-employed workers.
The shadow chancellor described small business owners and self-employed people as important contributors to the economy. He said government should reduce unnecessary regulation and support business growth.
Griffith has also commissioned a review of regulations affecting small businesses. Lord Mackinlay of Richborough and Robert Colvile will work on the report.
Labour Challenges Conservative Plans
Labour rejected Griffith’s demands.
A Labour spokesperson said the Conservatives had failed to explain how their proposed tax cuts would affect government finances.
The spokesperson also accused the Conservatives of wanting to remove workers’ rights while offering tax reductions without explaining which services would face cuts.
Labour also linked Griffith to the government of former prime minister Liz Truss. Griffith served as a Treasury minister during the period of the 2022 mini-budget.
Griffith has defended parts of that economic programme, including its focus on tax cuts and deregulation.
Conservatives Consider Inheritance Tax Cut
The Conservatives are also facing questions about inheritance tax.
Reports have suggested that the party could promise to abolish the tax if it wins the next general election.
Griffith said he would like to reduce the tax. However, he stressed that any proposal would need a clear funding plan.
He pointed to Sweden as an example, noting that the country abolished inheritance tax in 2005.
Reform UK has also previously discussed cutting inheritance tax. However, its Treasury spokesperson Robert Jenrick said the policy would not be a priority.
Unions Push for Different Tax Changes
The Conservative demands come as trade unions prepare to meet Healey ahead of the Budget.
Unite has called for the government to reverse the freeze on tax thresholds. Other unions are also expected to present proposals to the chancellor.
The government faces competing demands as it prepares its first major fiscal event under Burnham and Healey.
Healey has pledged to follow Labour’s fiscal rules. He has also said the government must control public spending while pursuing stronger economic growth.
Budget Faces Economic Pressure
The October Budget will arrive against a difficult economic backdrop.
UK inflation reached 3.1% in August, while higher energy prices have added pressure to household and business costs. The Bank of England kept its interest rate at 3.75% on September 17 but warned that prolonged energy-price pressure could push inflation higher.
Burnham has said the government must make difficult decisions.
At the same time, Conservatives are demanding clarity over taxes, while unions want changes that could affect government revenue.
Healey will therefore face competing pressures when he delivers the Budget on October 28.
The debate over Burnham tax rises is likely to continue until the chancellor sets out the government’s final plans.
