Shadow Chancellor Andrew Griffith used his first major speech since appointment by Conservative leader Kemi Badenoch to deliver a stark warning to the Labour Party, arguing that tax rises and administrative red tape are already crushing the UK’s small business sector. Speaking ahead of the Budget, Griffith insisted the Government must cut taxes and simplify the system, claiming that complying with tax requirements has become a “form of tax in its own right.” His intervention comes as small businesses face a combined annual cost of £25 billion due to compliance burdens, with owners spending an average of 44 hours per year on tax paperwork, according to Federation of Small Businesses estimates.
“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,” Griffith said, in comments reported ahead of the speech. “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.”
In his address, Griffith announced the creation of a taskforce tasked with investigating reform of the tax compliance system, with the aim of reducing the burden on small firms and the self-employed. The group will be chaired by Conservative peer Lord Mackinlay of Richborough, the former South Thanet MP, and Robert Colvile, the outgoing director of the Centre for Policy Studies think tank. Lord Mackinlay said he was “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.”
The speech also highlighted the political dimension, with Griffith naming shadow chief secretary to the Treasury John Healey and his predecessor Rachel Reeves in criticism of the party’s fiscal approach. He claimed that Andy Burnham and other local leaders must rule out tax rises at the Budget and pledge not to introduce an exit tax or any new levies. “Unlike Labour, the Conservatives are listening to business, and we are committed to making tax lower and simpler,” he said.
Griffith’s Intervention: A New Direction for Tax Policy
The shadow chancellor’s speech marks the most significant intervention yet from the Tories on economic policy since Badenok’s leadership reset at the end of August. By framing tax compliance as a barrier to growth rather than a necessary function of state, Griffith is attempting to reposition the Conservative Party as the champion of the “forgotten” small business voter. His rhetoric echoes longstanding Tory arguments about the “administrative state,” but the inclusion of specific figures—£25 billion and 44 hours—lends the address a data-driven urgency that previous shadow chancellor interventions have often lacked.
Griffith’s insistence that the tax system itself functions as a tax raises questions about the practicality of reform without deeper structural change. While the £25 billion figure represents a substantial sum, campaigners note that the real impact lies in the time and resources diverted from core business activities. The taskforce’s mandate to examine these issues suggests the Conservatives are preparing a long-term policy platform, but critics argue that without a change in government, such recommendations may remain advisory rather than legislative.
The Compliance Crisis: £25 Billion and 44 Hours
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