Shabana Mahmood, the Labour MP for Birmingham, has endorsed a proposal to introduce a 5p HMRC income tax surcharge for certain workers, effectively raising the top rate to 50%. This policy would mean an additional £1,240 per year for individuals earning £150,000, while those on £200,000 would face an extra £3,740 annually. Mahmood's backing of the measure comes as she emerges as a surprise frontrunner for the role of Chancellor of the Exchequer, should Andy Burnham become Prime Minister.
Mahmood's Rise in the Political Spotlight
The new Labour MP for Makerfield, reportedly Andy Burnham, has selected Mahmood as his preferred Chancellor. This has thrust the Birmingham MP into the national spotlight, prompting scrutiny of her past voting record and policy positions. Among the policies under review is the 50% income tax rate, which Mahmood supported in 2014. The proposed increase from the current 45% rate to 50% would generate significant additional revenue from high earners.
Criticism from Party Colleagues
However, Mahmood's potential appointment has drawn sharp criticism from within her own party. One Burnham ally told The Times: "Shabana has no sense of the economics. It's just not something she's ever spoken about. She's not collaborative. It's not clear how she would drive the machine." Another Labour MP echoed these sentiments, stating: "It's baffling a lot of people because nobody knows what her views are on the economy. Does she even have any? She's never done a speech or intervention. It's just absolutely bizarre and I can't see her as a sensible appointment."
Comparisons with Ed Miliband
Rachael Maskell, a Left-wing backbencher who played a key role in the revolt over Sir Keir Starmer's welfare reforms, contrasted Mahmood unfavourably with Ed Miliband. "Ed has Treasury experience and he's been able to bring our party together around some very difficult issues, really advancing the whole climate agenda and winning the argument. Shabana, on the other hand, hasn't brought our party together. Even this week many of us couldn't support the legislation she is putting through [on immigration]. She hasn't got the level of skill and experience to provide the leadership that is needed in the Treasury. Ed has Treasury experience. That really does matter. Ed shines well above Shabana. It would be a mistake to appoint Shabana."
Implications for the Treasury
Mahmood's potential appointment raises questions about the direction of economic policy under a Burnham premiership. The proposed 50% tax rate would represent a significant shift from current fiscal policy, targeting high earners to fund public spending. However, critics argue that Mahmood lacks the economic credentials and collaborative skills necessary to manage the Treasury effectively. As Burnham prepares to form his government, the decision over who will lead the nation's finances remains a contentious issue within Labour ranks.
