The Conservative Party is calling on Prime Minister Andy Burnham to commit to avoiding tax increases when he presents his first Budget on 28 October. The demand comes as the government faces mounting pressure over its fiscal position, with analysts warning that higher borrowing costs and spending pressures may force difficult choices on taxation.
Andrew Griffith, who took on the role of shadow chancellor last month, made the case to journalists ahead of his first major speech in the position. He argued that elevated tax rates in the United Kingdom are prompting young people to pursue opportunities abroad, framing this as a drag on the nation's economic prospects.
When pressed on reports that the Conservatives might pledge to abolish inheritance tax, Griffith stopped short of confirming the policy. He said he would welcome such a move but stressed it would need to be accompanied by credible funding plans.
"I'm going to be responsible and only want to make promises I can keep,"he stated, adding that
"We've got to fully find the money."
Labour swiftly rejected the Conservative criticism. A party spokesperson said:
"We won't take any lectures from the Tories on the economy – not least when it was only last week that Griffith was praising the 'lots of good things' in Liz Truss's disastrous mini-budget."
The backdrop to this political sparring is significant. According to , Healey is approaching his debut budget with investors concerned about higher inflation, oil prices stemming from regional tensions, shrinking fiscal headroom, and mounting spending commitments. The chancellor has acknowledged the constraints, warning that the Budget would be
"challenging"due to the conflict in the Middle East, though he has pledged to make
"difficult decisions"on the economy.
Healey has maintained a cautious stance on tax policy. According to reporting from a national broadcaster, the chancellor has repeatedly declined to rule out tax increases while reiterating that Labour will not raise taxes on working people. Analysis from a major news outlet notes that Labour is adhering to its manifesto commitment not to increase income tax, national insurance, or VAT, yet analysts expect the budget may include tax rises in other areas given the fiscal pressures.
What are the Conservatives proposing?
Griffith argued that the government should avoid raising taxes and instead pursue spending restraint. He called for the administration to
"pause job-destroying red tape"and warned that regulatory burdens are dampening the job market. The Conservatives cited figures from the Federation of Small Businesses suggesting that tax compliance costs small enterprises £25 billion annually, with the average firm spending 44 hours per year on tax administration.
To fund their alternative approach, Griffith said the Conservatives would reform the welfare system, reduce foreign aid spending, and trim central government costs in Whitehall. On the inheritance tax question specifically, he noted that he had recently visited Sweden to study how that country abolished inheritance taxes in 2005, suggesting the Conservatives are exploring the policy's feasibility.
The party has appointed Lord Mackinlay of Richborough and Robert Colvile, former director of the Centre for Policy Studies think tank, to produce a report on cutting business regulations. Griffith also contended that Labour had raised taxes at its previous two Budgets, saying the
"pips are well and truly squeaking."
What is Labour's position on taxes?
While Healey has not explicitly ruled out all tax increases, the government has committed to protecting working people from higher income tax, national insurance, and VAT. However, reporting indicates that Healey faces pressure from higher borrowing costs, which have left limited fiscal room, and from the need to fund social care without breaking manifesto pledges.
On Thursday before the Budget, trade unions are scheduled to meet with the chancellor to present their demands. The Unite union is pushing the government to reverse the freeze on tax thresholds, arguing this would ease pressure on workers' incomes.
What happens next?
Healey will deliver his first Budget on 28 October 2026. The government is still weighing how to remain within fiscal rules while protecting key manifesto commitments, according to available reporting. The outcome will shape the political landscape heading into the final stretch before the next general election and will test whether Labour can balance its spending ambitions with its tax pledges.
