Do not make a difficult time worse with tax hikes, warns shadow chancellor

The shadow chancellor has warned it is “a difficult time in the wider world” and the Government should not make it worse by raising taxes.

Andrew Griffith’s comments on BBC Breakfast came ahead of his first major speech since being appointed shadow chancellor by Tory leader Kemi Badenoch at the end of August.

Later on Thursday, he will say Chancellor John Healey cannot afford to raise taxes at the Budget following similar moves by his predecessor Rachel Reeves, and will urge the Government to slash tax compliance red tape to help small businesses and self-employed people.

Mr Griffith told the BBC: “This is not a moment to put up taxes, we’ve had two budgets that have put up taxes to the highest ever recorded level, let’s just take that off the table.”

John Healey has taken over as Chancellor from Rachel Reeves (Yui Mok/PA)

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Taxes and the “fear of taxes” are driving “really big taxpayers to leave our country for overseas, taking hundreds of millions of pounds of tax revenues that will pay for public services”, he also warned.

Asked how many of those highest taxpayers have left the UK, he said: “Well, one of the tragic things is the Government seems entirely passive and neutral on this, so I’ve asked many times the Treasury what numbers have they got, how many people have left – we’ve certainly seen numbers in the public domain that say it’s tens of thousands.”

The shadow chancellor cited hedge fund billionaire Chris Rokos’s departure, but did not offer any other specific evidence for the “tens of thousands” claim.

Mr Rokos is set to leave for Greece, it was reported earlier this month.

Mr Griffith told the programme: “The ones that left very recently (Mr Rokos), reported in all the papers, paid tax of £330 million last year – now that’s an insane amount of tax, but how are you going to replace that? That would take about 38,000 ordinary people’s tax to replace that, that’s not going to happen.”

It was put to him that “you don’t have any evidence they’re leaving, is that right?”, and Mr Griffiths responded: “That’s in public sight, I mean, that’s been reported, including on the BBC, I don’t talk about individuals’ tax affairs, but that story about Chris Rokos – who runs a very successful finance business here – has been reported on the BBC and other places, so, you know, people will take their own view on that, but it is by all accounts tens of thousands, it could be more.”

He said: “We’ve had two budgets under previous Labour administrations now that have raised the burden of tax to its all-time recorded high, they were based on a lot of extra public spending that has itself caused all those difficulties you heard about in the economy.

“It’s a difficult time in the wider world but the Government shouldn’t be making it any worse.

“The thing that they could do right now is take off the table the fears of ordinary small businesses, the self-employed, who are getting up now, going to work, and allow them to get on with their lives with confidence that the taxes are not going to go up.”

It was put to him that the last Conservative government “handed over the highest tax burden in 70 years”, and he responded “obviously the Covid pandemic was the big factor” and the tax burden was falling before that.

During his speech, Mr Griffith will announce he has commissioned a taskforce to investigate how to reform the tax compliance system, with a view to reduce the burden faced by small businesses.

It will be led by Tory peer Lord Mackinlay of Richborough, the former South Thanet MP, and Robert Colvile, the outgoing director of the Centre for Policy Studies think tank.

Small businesses face a combined cost of £25 billion a year because of tax compliance, and business owners spend 44 hours a year on tax paperwork, the Federation of Small Businesses has previously estimated.

A Labour spokesperson said on Wednesday: “We won’t take any lectures from the Tories on the economy – not least when it was only last week that Andrew Griffith was praising the ‘lots of good things’ in Liz Truss’s disastrous mini-budget.

“The Chancellor is fully focused on his priorities: giving families and businesses breathing space, backing British jobs, and driving growth in every postcode, underpinned by a commitment to meet the fiscal rules.”