He was from a prominent clan that descended from the imperial house of the Liang dynasty, and his grandfather Xiao Song was a chancellor during Emperor Xuanzong's reign.
"[5] Due to his being the son of a princess, he was, early in his career, made a Gongmenlang (宮門郎), in charge of the office of the palace gates (宮門局, Gongmenju).
Xiao Fu responded, "I, an imperial servant, am selling this ancestral property because of poverty, to aid the widows and young of the clan.
At that time, there was a famine in the prefecture, and he opened the food storages that were overseen by the governor of Jingzhao Circuit (京兆, i.e., the Chang'an region) to give to the people, without approval from his superiors.
Meanwhile, Emperor Dezong, finding Fengtian to be too small of a city for him and his followers, wanted to head for Fengxiang (鳳翔, in modern Baoji, Shaanxi), then governed by the former chancellor Zhang Yi but formerly under Zhu's control.
How can the imperial train put itself into such great danger?Emperor Dezong responded that he had already decided to head to Fengxiang, but on Xiao's objection will remain at Fengtian for one more day.
The next day, news arrived that Zhu's former subordinate Li Chulin (李楚琳) had mutinied, killed Zhang, and taken over Fengxiang.
Soon thereafter, Xiao, was made the minister of civil service affairs (吏部尚書, Libu Shangshu) and given the designation Tong Zhongshu Menxia Pingzhangshi (同中書門下平章事), making him a chancellor de facto, along with Liu Congyi and Jiang Gongfu.
[9] By late 784, the general Li Sheng had destroyed Zhu's regime, allowing Emperor Dezong to return to Chang'an.
Xiao had also returned from his mission, and he suggested to Emperor Dezong that Chen Shaoyou (陳少遊), the military governor of Huainan Circuit (淮南, headquartered in modern Yangzhou, Jiangsu), who had submitted to Li Xilie during the time Emperor Dezong was away from Chang'an, be replaced by Wei Gao—a Fengxiang officer who had resisted Li Chulin.
However, Xiao was soon surprised when Liu Congyi stated to him, "Ma Qinxu [(馬欽緒, an eunuch who served as imperial messenger)] informed me that the Emperor wanted me to discuss with you, Lord, your proposal, and then carry it out without informing Li Mian and Lu Han [(two other chancellors who served with Xiao and Liu)].
In winter 784, Emperor Dezong removed him from his chancellor position and made him a member of the staff of the Crown Prince Li Song.
[10] In 787, a scandal involving Princess Gao—the daughter of Emperor Suzong (and thus aunt to Emperor Dezong) and the widow of Xiao Fu's cousin Xiao Sheng (蕭升), whose daughter was the wife and crown prince to Li Song—unfolded, as she was found to have had a large number of young lovers, and she was further accused of using witchcraft.
[11] Emperor Dezong, still resentful of Xiao Fu, let him keep his rank but exiled him to Rao Prefecture (饒州, in modern Shangrao, Jiangxi).