Shabana Mahmood, the Birmingham MP and reported frontrunner to become Chancellor under Prime Minister Andy Burnham, has outlined plans to protect working people from tax increases while targeting high earners with significant property and investment income.
Tax proposals for high earners
According to reports, Ms Mahmood would focus tax rises on individuals who derive more than 10% of their income from property, investments, and dividends. She could also lower the £125,140 threshold at which the highest rate of income tax applies. This approach aims to shield "working people" from additional tax burdens, aligning with commitments from Mr Burnham and Ms Mahmood not to raise taxes for this group.
Past support for 50p tax rate
Ms Mahmood has a history of advocating for higher taxes on the wealthy. In 2014, she called for a 50p income tax rate, stating it was "unfair and wrong" of the Conservative Party to reduce the top rate to 45p. She argued that it would "be right for the next Labour government to raise it to 50p again." As a shadow Treasury minister, she told the Commons in 2014 there was "no justification for giving a huge tax cut to the richest in our country," adding that "ordinary working people" had been left worse off.
Political reactions
Sir Mel Stride, the Conservatives' shadow chancellor, warned Mr Burnham and Ms Mahmood to learn from what he described as "Rachel Reeves's disastrous economic incompetence," saying: "Britain cannot afford yet more tax." He added: "Andy Burnham isn't even PM yet and he is already saying he might 'ask for a little more' tax. His reported pick as chancellor also has a long record of calling for tax hikes. Britain cannot afford yet more tax, spend and borrow profligacy and yet more broken promises from the party that pledged not to raise taxes. Only the Conservatives have the plan to cut taxes and deliver a stronger economy and stronger country."
Robert Jenrick, Reform UK's shadow chancellor, said families faced paying thousands more in taxes under a Burnham government despite lacking the "democratic mandate to raise them by a penny." He added: "Andy Burnham has backed billions in tax rises. Shabana Mahmood has backed billions more."
Context and implications
Ms Mahmood's reported plans come as she emerges as the favourite for Chancellor if Andy Burnham becomes Prime Minister. The proposals aim to balance revenue generation with protecting working people, but have drawn sharp criticism from opposition parties who warn of increased tax burdens and economic risks.
