Shadow Chancellor warns Labour against tax rises and red tape for small businesses

John Healey cannot afford to raise taxes at the Budget following similar moves by his predecessor Rachel Reeves, the shadow chancellor will warn.

Andrew Griffith will also urge the Government to take further steps to help small businesses and self-employed people, by slashing tax compliance red tape.

In his first major speech since being appointed as shadow chancellor by Tory leader Kemi Badenoch at the end of August, Mr Griffith will say small businesses are taxed too highly, and claim that complying with the tax system is a form of tax in its own right.

Ahead of the speech, Mr Griffith said: “Labour are squeezing small businesses dry. They are taxing them too much and crushing them with a complex tax system that is working against them.

“Labour’s jobs tax and business rates raid have done immense damage, and their employer red tape has placed yet another burden on the shoulders of businesses.

“In addition to these costs, the average small business now spends more than a working week every year doing the Government’s paperwork.

“We need to cut taxes and make the tax system easier to navigate. Andy Burnham and John Healey must rule out tax rises at the Budget and pledge not to increase an exit tax or any other new taxes.

“Unlike Labour, the Conservatives are listening to business, and we are committed to making tax lower and simpler.”

During the 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.

Lord Mackinlay said: “Small businesses and the self-employed are the backbone of the nation but have spent far too long being penalised by the state simply for wanting to just get things done.

“I’m honoured to work with the shadow chancellor to put this right for the millions of people up and down the country who are the main drivers of growth in the economy.”