Shabana Mahmood, the Birmingham MP and current Home Secretary, is reportedly set to become Chancellor under incoming Prime Minister Andy Burnham, with five key taxes remaining unchanged. According to the Financial Times, Mahmood will replace Rachel Reeves at the Treasury when Burnham announces his cabinet on Monday after becoming prime minister. The move has been welcomed by financial markets, sources say.
Taxes Left Untouched
Mahmood and Burnham are expected to adhere to Labour's manifesto pledge not to increase National Insurance, the basic, higher, or additional rates of income tax, or VAT. This means these five taxes will remain at current levels, providing relief for households amid economic uncertainty. The commitment is seen as a boost for families and businesses alike.
Political Background
The i Paper reported that Mahmood now leads the race for chancellor and has indicated willingness to leave the Home Office for the Treasury role. A senior Labour source said, “Shabana had been saying she wants to stay at the Home Office, now she is saying she is prepared to move wherever helpful.” An ally of Mahmood added, “She is focused on her job as Home Secretary.”
Market and Union Reactions
The prospect of Mahmood as chancellor has been welcomed by financial markets, according to the FT. A source close to the incoming prime minister's deliberations said senior Cabinet positions are “pretty much locked in now,” signaling Mahmood is in line for the job. Separately, Sharon Graham, general secretary of the Unite union, commented that Ed Miliband's appointment to the Treasury would be a “noose around job creation” in Britain, contrasting with the market-friendly view of Mahmood's potential appointment.
