Conservative Shadow Chancellor Andrew Griffith has urged Labour to cut taxes at the next Budget, warning that the tax burden is reaching “nosebleed territory” and that financial markets can detect weakness. He criticised Chancellor John Healey’s preparedness and proposed replacing the IR35 rules for self-employed workers, which he described as excessively burdensome for small businesses.

Griffith has commissioned a taskforce to examine tax compliance, citing estimates that small firms spend £25 billion a year on compliance and 44 hours annually on paperwork. The Conservatives’ proposals come as Healey’s Budget headroom narrows, with markets raising government borrowing costs, inflation increasing to 3.1 per cent in August, elevated oil prices and concerns that energy bills and interest rates could rise further.