Shabana Mahmood, the Birmingham MP widely expected to become Chancellor under Andy Burnham's leadership, has backed a £1,240 tax increase for workers earning £150,000 annually. The Labour manifesto pledged not to raise basic, higher, or additional rates of income tax, but Mahmood has previously stated that the additional rate should be returned to 50p, from its current 45p level.
Tax increase details
If the additional rate is raised from 45% back to 50%, where it stood from 2010 to 2013, the tax paid on a £150,000 income would increase from £51,189 to £52,432. This represents an increase of just over £1,240, not including National Insurance contributions. Mahmood's stance signals a potential departure from the manifesto commitment, as she prepares to take the reins at Number 11 Downing Street.
Burnham's leadership and unity pledge
Andy Burnham, who became Labour leader after Keir Starmer, pledged to lead a united government free of infighting and factional politics. Addressing senior Labour politicians and supporters on Friday, Burnham said the country was “crying out for a new politics” and that it was Labour’s “last chance to change” as a united movement. He praised Starmer's legacy, stating, “Under Keir Starmer’s leadership, we went from our worst defeat to one of the best victories in history.”
Call for change
Despite praising Starmer, Burnham sought to draw a line under the past by asking whether Labour had “been good enough” and pledging to “do better.” He emphasized, “I will work relentlessly to build a culture of one Labour team, because change starts with us. We won’t beat Britain’s new right if we are consumed by infighting and pulling in different directions. That is an indulgence.”
Impact on workers
The proposed tax increase would affect high earners, with the additional £1,240 bill targeting those in the top income bracket. Mahmood's selection as Chancellor, following her victory over Ed Miliband for the role, has caused anxiety on the left of the party. However, Burnham's call for unity aims to mitigate internal divisions as Labour prepares for government.
